The impact of remittances on economic growth in small-open developing economies

Ahortor, Christian R.K. and Adenutsi, Deodat E. (2008): The impact of remittances on economic growth in small-open developing economies. Published in: Journal of Applied Sciences , Vol. 9, No. 18 (September 2009): pp. 3275-3286.

Abstract

The essence of this study is to verify the macroeconomic implications of cross-border remittances for economic growth prospects of small-open developing economies for the period, 1996-2006. A set of dynamic panel model, specified within the framework of Blundell-Bond Generalized Method of Moment (GMM) was empirically analyzed. Using annual panel data from 31 small-open developing countries from Sub-Saharan Africa, Latin America and the Caribbean, this paper argues that, contemporaneously, remittances contribute significantly to economic growth in small-open developing economies. Remittances, however, contribute more to long-run economic growth in Latin America and the Caribbean than to Sub-Saharan Africa. In dynamic terms, remittances retard economic growth, but with overall positive impact across these regions.

• Item Type: MPRA Paper
• Language: English
• Keywords: Remittances; Economic Growth; Panel Data; Latin America and Caribbean; Sub-Saharan Africa
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Empirical Studies of Economic Growth ; Aggregate Productivity ; Cross-Country Output Convergence; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O54 - Latin America ; Caribbean; C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C33 - Panel Data Models ; Spatio-temporal Models; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R23 - Regional Migration ; Regional Labor Markets ; Population ; Neighborhood Characteristics; F - International Economics > F2 - International Factor Movements and International Business > F24 - Remittances

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