Do Remittances Promote Economic Growth and Reduce Poverty? Evidence from Latin American Countries

Ekanayake, E. M.; Moslares, Carlos

doi:10.3390/economies8020035

Cited by 39 publications

(32 citation statements)

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“…Examining the effects of remittances on economic growth showed that remittance flows were beneficial for economic growth in different groups of countries [15][16][17][18] or for individual countries [19]. In addition, the empirical analysis of the relationship between economic growth and remittances showed that remittance flows of workers could have a negative effect on economic growth, depending on the degree of development and geographical location of developing countries [20][21][22][23][24], an insignificant effect [25], or none [26,27].…”

Section: Introductionmentioning

confidence: 99%

“…Then, starting from the representation of GDP through a Cobb-Douglas-type production function, which involves the decomposition of GDP dynamics into the contributions of capital, labor, and productivity of factors [15,52], we proposed to estimate the relationship between labor, investment and remittances, and economic growth. Thus, we considered as a dependent variable the growth rate of GDP, to which we added as independent variables the real GDP per capita, labor force participation rate, gross fixed capital formation, and personal remittances.…”

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confidence: 99%

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Impact of Employed Labor Force, Investment, and Remittances on Economic Growth in EU Countries

et al. 2020

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This paper analyzes the evolution and influence of gross domestic product per capita, labor force participation rate, gross fixed capital formation, and personal remittances on economic growth for European Union (EU) countries, using data from the World Bank (1996–2019) and from Eurostat (the first two quarters 2019–2020). The study has three components: statistical analysis, analysis of the evolution for each country and EU, and estimation of the impact on economic growth rate by using a linear multifactorial regression model for 1996–2019, 1996–2008, and 2009–2019. The model was validated by econometric techniques. The long-term causal relationship between exogenous and endogenous variables was validated by the Granger test. The results of the study show a differentiated evolution of the indicators, and that all indicators are severely affected by the 2008 financial crisis and the debut of the COVID-19 crisis in early 2020. The model used shows the significant positive influence of labor and investment, and the minor effect of remittances on economic growth. In the context of the COVID-19 epidemic, the results of the study could be arguments to be considered for the redesign of economic policies at European Union level.

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Section: Introductionmentioning

confidence: 99%

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Impact of Employed Labor Force, Investment, and Remittances on Economic Growth in EU Countries

et al. 2020

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“…Massey (1987) argue that 68 to 86% of the Mexican migrants' remittances are used for consumption. Ekanayake and Moslares (2019) find that migrant workers' earning have a positive impact on long-run economic growth in most Latin American countries. Still, the result is ambiguous in the short-run.…”

Section: Literature Surveymentioning

confidence: 85%

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2021

IJEFR

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In this study, we investigate the impact of remittances and foreign aid (official foreign assistance) on investment and saving in South Asian countries. We also analyze the comparative influence of remittances and foreign aid in stimulating saving and investment. We use a sample of five South Asian countries over the period 1985-2018 and employ OLS and 2SLS method to estimate the effect of remittance and foreign aid on saving and investment. The result reveals that remittance has a positive impact on saving but has no significant effect on investment and shows that foreign aid has no significant impact on saving but negatively influences investment. In line with our results, a rise in 10 percent of remittances in South Asia raises savings by 1.6 percent in the OLS estimates and by 1.7 percent when we use 2SLS. At the same time for a 10% increase in foreign aid decreases saving by 4.3% and 3.3%, respectively, in two methods. For the second regression, an increase in 10% remittances hamper investment by 1.3% and 1% for OLS and 2SLS, respectively. And for the analogous 10% increase in foreign aid decrease investment by 5.4% and 5.2%, respectively. However, if foreign aid is efficiently used, it can be an important complement to remittances by permitting households to overcome the minimum threshold level and they can use a bigger portion of their remittances for savings and investment motive.

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“…This further implies that creating the incentives for productive factor accumulation is more important for output than factor accumulation itself (Easterly and Levine 2001). Likewise, Ekanayake and Moslares (2020) in the nexus of remittances and economic growth (GDP per capita growth) controlling capital, labor, human capital and remittance found the consistent magnitude (0.0644) of physical capital on GDP per capita growth. Based on the results in Table 2, TFP is derived using the coefficients of capital, labor and natural resources extraction rate.…”

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confidence: 97%

The Impacts of China–Africa Economic Relation on Factor Productivity of African Countries

2020

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This study attempts to empirically examine the impacts of the China–Africa economic relationship on factor productivity. The two-step system Generalized method of moments (GMM) estimator is applied to analyze the impacts of the Africa–China economic relationship on factor productivity of 44 African countries controlling Africa–China trade, Chinese foreign direct investment (FDI), and aid allocation to African countries for the periods 2003–2017. The estimation strategy controls endogeneity concerns. Another novelty of this study is calculating total factor productivity (TFP) using the regression approach and driving capital stock data. Additionally, the institutional quality index of countries is derived using principal component analysis. The findings of this study refer that the impact of the China–Africa economic relationship on the TFP of African countries is conditional to the domestic institutional quality of African countries. The results imply that the productivity embodied by the Africa–China economic relationship should be backed by the domestic adaptive capacity to use the benefit of China–Africa economic relations to excel factor productivity. Hence, the capability of African countries to benefit from the China–Africa economic relationship to enhance factor productivity should improve the institutional quality.

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Do Remittances Promote Economic Growth and Reduce Poverty? Evidence from Latin American Countries

Cited by 39 publications

References 32 publications

Impact of Employed Labor Force, Investment, and Remittances on Economic Growth in EU Countries

Impact of Employed Labor Force, Investment, and Remittances on Economic Growth in EU Countries

Untitled

The Impacts of China–Africa Economic Relation on Factor Productivity of African Countries

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