Jawaid, Syed Tehseen and Raza, Syed Ali (2012): Workers’ Remittances and Economic Growth in South Asia.
Download (330kB) | Preview
This study investigates the effect of workers’ remittances on economic growth of five South Asian countries namely Pakistan, India, Bangladesh, Sri Lanka & Nepal by employing long time series data from 1975 to 2009. Cointegration results confirm that there exist significant positive long run relationship between remittances and economic growth in India, Bangladesh, Sri Lanka and Nepal while, significant negative relationship exist between remittances and economic growth in Pakistan. Causality analysis shows bidirectional causality between remittances and economic growth in Nepal and Sri Lanka. On the other hand, unidirectional causality exist, runs from remittances to economic growth in Pakistan, India and Bangladesh. Sensitivity analysis confirms that the results are robust. It suggested that policy makers should make policies to reduce the transaction cost to welcome remittances in the region. In addition, countries especially Pakistan should more relying on increasing exports rather than workers’ remittances as foreign exchange earnings for sustainable and long run growth in the country.
|Item Type:||MPRA Paper|
|Original Title:||Workers’ Remittances and Economic Growth in South Asia|
|English Title:||Workers’ Remittances and Economic Growth in South Asia|
|Keywords:||Remittances, Economic Growth|
|Subjects:||F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies
F - International Economics > F2 - International Factor Movements and International Business > F24 - Remittances
|Depositing User:||Syed Ali Raza|
|Date Deposited:||24. May 2012 13:29|
|Last Modified:||22. Apr 2015 09:37|
Ahmed, J., Zaman, K. and Shah, I. A. 2011: An Empirical Analysis of Remittances-Growth Nexus in Pakistan Using Bound Testing Approach. Journal of Economics and International Finance 3 (3), 176-186.
Azam, M. and Khan, A. 2011: Workers’ Remittances and Economic Growth: Evidence from Azerbaijan and Armenia. Global Journal of Human Social Science 11 (7).
Chami, R., Fullenkamp, C. and Jahjah, S. 2003: Are Immigrant Remittances Flows a Source of Capital for Development?. International Monetary Fund Working Paper, WP/03/189.
Das, A. and Chowdhury, M. 2011: Remittances and GDP Dynamics in 11 Developing Countries: Evidence from Panel Cointegration and PMG Techniques. Romanian Economic Journal 14, 3-24.
Dicky, D. A. & Fuller, W. A. 1979: Distribution of the Estimators for Autoregressive Time Series with a Unit Root. Journal of the American Statistical Association 74, 427-431.
Engle., R. F. & Grange, C. W. 1987: Cointegration and Error Correction: Representation; Estimation and Testing. Econometrica 55, 251-76.
Faini, R. 2006: Migration and Remittance: The Impact on the Countries of Origin. Paper Presented at Fourth AFD/EUDN Conference on “Migration and Development: Mutual Benefits?” held on November 08, 2006, Paris, France.
Fayissa, B. and Nsiah, C. 2010: Can Remittances Spur Economic Growth and Development? Evidence from Latin American Countries (LACs). Middle Tennessee State University Working Paper Series, March 2010.
Fayissa, B. and Nsiah, C. 2008: The Impact of Remittances on Economic Growth and Development in Africa. Middle Tennessee State University Working Paper Series, February 2008.
Gujarati, D. N. and Porter, D. C. 2008: Basic Econometrics, “McGraw Hill Publisher”, Edition 5
Jawaid, S. T. and Waheed, A. 2011: Effects of Terms of Trade and its volatility on Economic Growth: A Cross Country Empirical Investigation. Transition Studies Review 18 (2), 217-229.
Johansen, S. & Juselius, K. 1990: Maximum Likelihood Estimation and Inference on Cointegration with Applications to the Demand of Money. Oxford Bulletin of Econometrics and Statistics , 169-210.
Karagoz, K. 2009: Workers’ Remittances and Economic Growth: Evidence from Turkey. Journal of Yasar University 4 (13), 1891-1908.
Kohpaiboon, A. 2003: Foreign Trade Regimes and The FDI-Growth Nexus: A Case Study of Thailand. Journal of Development Studies 40(2), 55-69.
Levine, R. and Renelt, R. D. 1992: A Sensitivity Analysis of Cross Country Growth Regression. American Economic Review 82 (4), 942-963.
Mohamed, S.E. 2009: Workers’ Remittances and Growth in MENA Labor Exporting Countries. International Network for Economic Research Working Paper, 2009.10.
Orozco, M. 2003: Worker Remittances in the International Scope. Inter American dialogue, March.
Phillips, P. B. & Perron, P. 1988. Testing for a Unit Root in Time Series Regression. Biometrika Vol. 75, 335-346
Qayyum, A., Javid, M. and Arif, U. 2008: Impact of Remittances on Economic Growth and Poverty: Evidence from Pakistan. Munich Personal RePEc Archive Paper No. 22941.
Siddique, A., Selvanathan, E. A. and Selvanathan, S. 2010: Remittances and Economic Growth: Empirical Evidence from Bangladesh, India and Sri Lanka. University of Western Australia Discussion Paper 10.27
Shahbaz, M. and Aamir, N. 2007: Rural-Urban Income Inequality under Financial Development and Trade Openness in Pakistan: The Econometric Evidence. The Pakistan Development Review 46 (4), 657-672.
Waheed, A. and Aleem, A. 2008: Workers’ Remittances and Economic Growth: Empirical Evidence from Pakistan. Journal of Social Science and Humanities 47 (1), 1-12
Wong. H. T. 2004: Terms of Trade and Economic Growth in Malaysia. Labuan Bull International Business Finance 2 (2), 105-122
World Bank 2007: World Development Indicators, CD-ROM, Washington, D.C.: World Bank
World Development Indicators (various years) Web Link: http:// http://data.worldbank.org/data-catalog/world-development-indicators
Yasmeen, K., Anjum, A., Ambreen, S. and Twakal, S. 2011: The Impact of Workers’ Remittances on Private Investment and Total Consumption in Pakistan. International Journal of Accounting and Financial Reporting 1 (1).