Jawaid, Syed Tehseen and Raza, Syed Ali (2012): Workers’ remittances and economic growth in China and Korea: an empirical analysis.
Download (259kB) | Preview
This study investigates the relationship between workers’ remittances and economic growth in China and Korea by employing time series data from period of 1980 to 2009. Cointegration results confirm that there exist significant positive long run relationship between remittances and economic growth in Korea, while, significant negative relationship exist between remittances and economic growth in China. Error correction model confirms the significant positive short run relationship of workers’ remittances with economic growth in Korea while, the results of China were insignificant in short run. Causality analysis confirms unidirectional causality runs from workers’ remittances to economic growth in both China and Korea. Sensitivity analysis confirms that the results are robust. It is suggested that Korea should form friendly policy to ensure the continuous inflows of workers’ remittances and their efficient utilization to ensure economic growth. On the other hand, China should keep an eye to reduce voluntary unemployment leads to decrease in productivity and growth in the country.
|Item Type:||MPRA Paper|
|Original Title:||Workers’ remittances and economic growth in China and Korea: an empirical analysis|
|English Title:||Workers’ Remittances and Economic Growth in China and Korea: An Empirical Analysis|
|Keywords:||Remittances, Open Economy, Economic Growth|
|Subjects:||F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics
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 14:50|
|Last Modified:||15 Oct 2016 02:55|
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, Vol. 3 No. 3, pp. 176-186.
Ahortor, C.R.K. Adenutsi, D.E. (2009), “The Impact of Remittances on Economic Growth in Small-Open Developing Economics”, Journal of Applied Sciences, Vol. 9 No. 18, pp. 3275-3286.
Azam, M. and Khan, A. (2011), “Workers’ Remittances and Economic Growth: Evidence from Azerbaijan and Armenia”, Global Journal of Human Social Science, Vol. 11 No.7.
Barro, R.J. (1996), “Determinants of Economic Growth: A Cross-Country Empirical Study”, NBER, Working Paper No: 5698.
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.
Cochrane, D. and Orcutt, G.H. (1949), “Application of Least Square Regression to Relationship Containing Autocorrelated Error Term”, Journal of the American Statistical Association, Vol. 44, pp. 32-61.
Das, A. and Chowdhury, M. (2011), “Remittances and GDP Dynamics in 11 Developing Countries: Evidence from Panel Cointegration and PMG Techniques”, Romanian Economic Journal Vol. 14, pp. 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 Vol.74, pp. 427-431.
Engle, R. F. & Grange, C. W. (1987), “Cointegration and Error Correction: Representation; Estimation and Testing”, Econometrica Vol. 55, pp. 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.
Hendry, D.F. (1980), “Econometrics-Alchemy or Sciences”, Economica Vol. 47, 387-406.
Imai, K. Gaiha, R. Ali, A. and Kaicker, N. (2011), “Remittances, Growth and Poverty: New Evidence from Asian Countries”, Research Institute for Economics and Business Administration KOBE University, Discussion Paper No. 30.
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 Vol. 18 (2), pp. 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, pp. 169-210.
Jones, J.D. (1989), “A Comparison of Lag Length Selection Techniques in Tests of Granger Causality between Money Growth and Inflation: Evidence from the US: 1959-86”, Applied Economics, Vol. 21 No. 6, pp. 809-822.
Jongwanich, J. (2007), “Workers’ Remittances, Economic Growth and Poverty in Developing Asia and the Pacific Countries”, UNESCAP, Working Papers, WP/07/01.
Karagoz, K. (2009), “Workers’ Remittances and Economic Growth: Evidence from Turkey”, Journal of Yasar University, Vol. 4 No.13, pp. 1891-1908.
Kohpaiboon, A. (2003), “Foreign Trade Regimes and The FDI-Growth Nexus: A Case Study of Thailand”, Journal of Development Studies, Vol. 40 No.2, pp. 55-69.
Levine, R. and Renelt, R. D. (1992), “A Sensitivity Analysis of Cross Country Growth Regression”, American Economic Review, Vol. 82 No.4, pp. 942-963.
Mohamed, S.E. (2009), “Workers’ Remittances and Growth in MENA Labor Exporting Countries” International Network for Economic Research, Working Paper, 2009.10.
Phillips, P. B. & Perron, P. (1988), “Testing for a Unit Root in Time Series Regression”, Biometrika Vol. 75, pp. 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
Sofranko, A.J. Idris, K. (2009), “Use of Overseas Migrants’ Remittances to the Extended Family for Business Investment: A Research Note”, Rural Sociology, Vol. 64, pp. 464-481.
Waheed, A. and Aleem, A. (2008), “Workers’ Remittances and Economic Growth: Empirical Evidence from Pakistan”, Journal of Social Science and Humanities, Vol. 47 No.1, pp. 1-12
Wong, H. T. (2004), “Terms of Trade and Economic Growth in Malaysia”, Labuan Bull International Business Finance, Vol. 2 No.2, pp. 105-122
World Development Indicators (various years), Web Link: http://data.worldbank.org/data-catalog/world-development-indicators
Yanikkaya, H. (2003), “Trade Openness and Economic Growth: A Cross-Country Empirical Investigation”, Journal of Development Economics, Vol. 72, pp. 57– 89.
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, Vol. 1 No.1.