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Workers’ remittances and economic growth in China and Korea: an empirical analysis

  • Jawaid, Syed Tehseen
  • Raza, Syed Ali

This study investigates the relationship between workers’ remittances and economic growth in China and Korea by employing time series data from period of 1980 to 2009. Cointegration results confirm that there exist significant positive long run relationship between remittances and economic growth in Korea, while, significant negative relationship exist between remittances and economic growth in China. Error correction model confirms the significant positive short run relationship of workers’ remittances with economic growth in Korea while, the results of China were insignificant in short run. Causality analysis confirms unidirectional causality runs from workers’ remittances to economic growth in both China and Korea. Sensitivity analysis confirms that the results are robust. It is suggested that Korea should form friendly policy to ensure the continuous inflows of workers’ remittances and their efficient utilization to ensure economic growth. On the other hand, China should keep an eye to reduce voluntary unemployment leads to decrease in productivity and growth in the country.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 39003.

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Date of creation: 2012
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Handle: RePEc:pra:mprapa:39003
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  1. Ralph Chami & Connel Fullenkamp & Samir Jahjah, 2005. "Are Immigrant Remittance Flows a Source of Capital for Development?," IMF Staff Papers, Palgrave Macmillan, vol. 52(1), pages 55-81, April.
  2. Bichaka Fayissa & Christian Nsiah, 2010. "Can Remittances Spur Economic Growth and Development? Evidence from Latin American Countries (LACs)," Working Papers 201006, Middle Tennessee State University, Department of Economics and Finance.
  3. Ahortor, Christian R.K. & Adenutsi, Deodat E., 2008. "The impact of remittances on economic growth in small-open developing economies," MPRA Paper 37109, University Library of Munich, Germany.
  4. Katsushi S. Imai & Raghav Gaiha & Abdilahi Ali & Nidhi Kaicker, 2011. "Remittances, Growth and Poverty: New Evidence from Asian Countries," Discussion Paper Series DP2011-30, Research Institute for Economics & Business Administration, Kobe University.
  5. Archanun Kohpaiboon, 2003. "Foreign trade regimes and the FDI-Growth Nexus: a case study of Thailand," Journal of Development Studies, Taylor & Francis Journals, vol. 40(2), pages 55-69.
  6. Qayyum, Abdul & Javid, Muhammad & Arif, Umaima, 2008. "Impact of Remittances on Economic Growth and Poverty: Evidence from Pakistan," MPRA Paper 22941, University Library of Munich, Germany.
  7. Yanikkaya, Halit, 2003. "Trade openness and economic growth: a cross-country empirical investigation," Journal of Development Economics, Elsevier, vol. 72(1), pages 57-89, October.
  8. Abu Siddique & E. A. Selvanathan & Saroja Selvanathan, 2011. "Remittances and Economic Growth: Empirical Evidence from Bangladesh, India and Sri Lanka," Journal of Development Studies, Taylor & Francis Journals, vol. 48(8), pages 1045-1062, October.
  9. Syed tehseen, jawaid & Abdul, waheed, 2011. "Effects of Terms of Trade and its Volatility on Economic Growth: A Cross Country Empirical Investigation," MPRA Paper 32694, University Library of Munich, Germany.
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