Foreign Remittances and Economic Growth in Pakistan: An empirical investigation
This paper investigates the impact of foreign remittances on economic growth of Pakistan. We use secondary time series data for the period of 1978 to 2011. The multiple regression analysis is used to identify the relationship among the variables. GDP is taken as dependent variable while foreign remittances, FDI, inflation and exchange rate as independent variables. Augmented Dickey Fuller (ADF) test is used to check the stationary of variables and all variables found stationary at level. Ordinary Least Squares technique is applied to check the relation among these variables. Results indicate that foreign remittances have positive and significant relation with GDP of Pakistan while inflation and exchange rate has negative effect on economic growth. Foreign direct investment has positive but insignificant relation with GDP of Pakistan. One percent increase in foreign remittances will raise GDP by 0.25 percent. Our model is free from hetroskedasticity and autocorrelation with satisfactory functional form that suggests the stability of our model. The CUSUM and CUSUMSQ are showing that our model is structurally stable within the 5% of critical bounds. Pakistan needs stable and visionary government to enhance foreign capital inflow to boost investment and economic growth
|Date of creation:||Jul 2013|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Abdul Khaliq & Ilan Noy, 2007. "Foreign Direct Investment and Economic Growth: Empirical Evidence from Sectoral Data in Indonesia," Working Papers 200726, University of Hawaii at Manoa, Department of Economics.
- Elisabeth Huybens & Bruce D. Smith, 1997.
"Inflation, Financial Markets and Long-Run Real Activity,"
9707, Centro de Investigacion Economica, ITAM.
- Huybens, Elisabeth & Smith, Bruce D., 1999. "Inflation, financial markets and long-run real activity," Journal of Monetary Economics, Elsevier, vol. 43(2), pages 283-315, April.
- Bruno, Michael & Easterly, William, 1995.
"Inflation crises and long-run growth,"
Policy Research Working Paper Series
1517, The World Bank.
- Robert J. Barro, 2013.
"Inflation and Economic Growth,"
Annals of Economics and Finance,
Society for AEF, vol. 14(1), pages 121-144, May.
- Jinzhao Chen, 2015.
"Interprovincial Competitiveness and Economic Growth: Evidence from Chinese Provincial Data (1992–2008),"
Pacific Economic Review,
Wiley Blackwell, vol. 20(3), pages 388-414, 08.
- Jinzhao Chen, 2012. "Real Exchange Rate and Economic Growth: Evidence from Chinese Provincial Data (1992 - 2008)," PSE Working Papers halshs-00667467, HAL.
- Jawaid, Syed Tehseen & Raza, Syed Ali, 2012. "Remittances, Growth and Convergence: Evidence from Developed and Developing Countries," MPRA Paper 39002, University Library of Munich, Germany.
- 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.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:49132. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.