Impact of Remittances on Economic Growth in Developing Countries: The Role of Openness

Dastidar, Sayantan Ghosh

doi:10.1515/gej-2016-0066

Cited by 23 publications

(15 citation statements)

References 15 publications

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“…An increase in remittance flows of 1% of GDP could have led to significant economic growth per capita in the 1990s. These results may be connected with the role of openness as noted by Reference [50] highlighting the link between the openness and better institutions. The negative influence after 2000 was possibly caused by the overall economic slowdown that started in 2008 and resulted into the lower remittance flows to the developing countries.…”

Section: Resultsmentioning

confidence: 53%

“…Our estimates revealed that an increase in development aid and remittance flows led to significant long-term economic growth per capita only in the 1990s. These results may be connected with the role of openness as noted by Reference [50] highlighting the link between the openness and better institutions. A two-way effect may be present.…”

Section: Discussionmentioning

confidence: 53%

“…In this way, Reference [12] shows in his analysis that remittances accentuate, not ameliorate poverty in countries with a low level of financial development. The multi-country analysis was carried out by Reference [50]. This paper examined the relationship between remittances and economic growth for a sample of 62 developing countries over the period 1990-2014.…”

Section: Literature Reviewmentioning

confidence: 99%

“…This paper examined the relationship between remittances and economic growth for a sample of 62 developing countries over the period 1990-2014. Reference [50] emphasised the role of openness because the remittances seem to promote growth only in more opened countries. More important growth factors are the quality of domestic institutions and the overall macroeconomic environment in the receiving country.…”

Section: Literature Reviewmentioning

confidence: 99%

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Evaluation of the Long-Term Stability and Impact of Remittances and Development Aid on Sustainable Economic Growth in Developing Countries

2019

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In our paper, we analyse the long-term stability and impact of remittances and development aid on sustainable economic growth in developing countries. We use two data samples from countries that were recipients of both aid and remittances in the corresponding period. First, unbalanced data from the years 1970 to 2017; that is, how countries appear in the data. Second, balanced data, where we selected the largest possible set of countries for which data exists without gaps from the years 1970–2017. This dataset consists of 57 countries for the period from 1991 to 2017. Using linear regression models, we conclude that up until the end of the 1980s, the size of aid as a share of gross domestic product (GDP) was larger than the share of remittances. After that, the situation changed and the shares of both inflows were broadly similar. The inflow of remittances was more stable than the inflow of aid and development aid did not (on the contrary to remittances) contribute positively to sustainable economic growth if we consider the entire period between 1970 and 2017. Our results suggest that a statistically significant relationship between development aid and economic growth (per capita) may be observed only in the period from 1990 to 1999. Economic growth in developing countries is negatively influenced by the uncertainty related to the flows of official development assistance (ODA) and aid in all investigated decades. In the case of the remittance flows, the increased volatility tends to contribute negatively to sustainable economic growth only when the remittance flows represent a relatively higher share of GDP.

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Section: Resultsmentioning

confidence: 53%

Section: Discussionmentioning

confidence: 53%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

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Evaluation of the Long-Term Stability and Impact of Remittances and Development Aid on Sustainable Economic Growth in Developing Countries

2019

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“…This belief is somewhat justified because remittances in developing countries are found positively related with household welfare but at the same time produce more volatile business cycles [7,12,15]. Yet, whether remittances have any role in economic growth or financial development remains a country-specific question [3,8,9].…”

Section: Introductionmentioning

confidence: 99%

Remittances and Economic Growth in a Small and Volatile Economy

Abdel-Halim¹

2019

IJBER

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This paper investigates the relationship between worker remittances and economic growth in a small country with volatile macroeconomic conditions (namely, Jordan). Previous research determines three main channels through which the impact of remittances can be transmitted: labor supply, capital accumulation and investment, and productivity. A historical behavior of these variables since 1976 to 2016 is analyzed and discussed in the context of the Jordanian economic structure. The Autoregressive Distributed Lag (ARDL) model that allows economic growth (measured by growth in per capita GDP) and financial development (measured by bank credit) to be affected by their lagged values and by current and lagged values of remittances (measured by remittances as percentage of GDP) is used to test for equilibrating and long-term associations between remittances and economic growth and financial development indicators. The results show that although Jordanian worker remittances represent a vital source of financial flows, they are not used to smooth consumption by receiving households and have no impact on economic growth or financial development. Instead, they lead to increase in imports and trade deficit. Thus, if reverse migration of Jordanian workers takes place, it will lead to sudden increase in skilled labor supply, which will exacerbate Jordan's unemployment problems.

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