Do personal remittances influence economic growth in South Asia? A panel analysis

Abstract

This paper investigates the remittance and economic growth relationship using annual panel data for the period 1986-2019 on selected South Asian economies with trade openness (TOP) and foreign direct investment (FDI) inflow as control variables. The cross-sectional dependency test, second-generation panel unit root test, panel generalized least square (GLS), panel fully modified ordinary least squares (FMOLS), and Dumitrescu-Hurlin (D-H) panel causality tests are employed to accomplish the study. Both the GLS and FMOLS estimations ensure the positive impact of remittance on economic growth.The D-H causality test discloses unidirectional causality from remittances to economic growth. The findings suggest that South Asian economies may strive to attract more remittances, through augmenting international migration, enabling migration-friendly policy and regimes, creating training and support facilities at different levels for international migrants, diversifying exports, and being selective to FDI inflows, which will take care of economic growth in the region.

Impact of financial development and institutional quality on remittance-growth nexus: evidence from the topmost remittance-earning economies

“…Hence, any increase in personal remittance inflow invariably influences the economic expansion of the top-ten remittance-receiving economies positively. This finding reinforces previous studies such as Islam (2021) , Jushi et al. (2021) , Chuc et al.…”

“…They utilized data from 2000 to 2017, employed the VAR technique, and exhibited personal remittances’ positive influence on economic expansion. Islam (2021) investigated the remittance-growth nexus in four South Asian countries employing a panel framework for data from 1986 to 2019. The study employed a panel generalized least square method and Dumitrescu-Hurlin (D-H) causality check among others and exhibited positive support from remittances to economic expansion.…”

Trade off Between Military Expenditure and Fixed Capital Formation on Economic Growth: Panel Study of Some SAARC and ASEAN Countries

“…In this paper, first generation (Pesaran, 2007) and second generation (Pesaran et al, 2009) unit tests are employed due to the presence of interdependency among the countries under study to test the cross-sectional stationarity of the variable of interest. These econometric methods were applied to estimate South Asian remittances and economic growth in Islam (2022).…”

Transformation of international migrants in head wind: Evidence from Tajikistan in the 2010s

“…The top five countries include Tonga (37.6%), Haiti (37.1%), South Sudan (34.4%), Kyrgyz Republic (29.2%), and Tajikistan (28.2%) in the same year (World Bank, 2020). 2 Another important strand of research is the investigation on the impact of migration and remittances on the economy in the home country and region (e.g.,Islam et al, 2012Islam et al, , 2022 Murakami et al (2020). provide a case study for Tajikistan.3 The proportion of remittance inflows relative to GDP is 29.7% in Tajikistan, 29.6% in the Kyrgyz Republic, 15.6% in Moldova, 12.3% in Georgia, 11.9% in Armenia, and 11.8% in Ukraine.SHIMIZUTANI AND YAMADA…”

“…2 2 Another important strand of research is the investigation on the impact of migration and remittances on the economy in the home country and region (e.g., Islam et al, 2012, 2022). Murakami et al (2020) provide a case study for Tajikistan. …”