Do remittances spur economic growth? Evidence from developing countries

Abstract : This paper provides original econometric evidence on whether international remittance transfers spur economic growth based on data for a sample of 49 developing countries during the period 2001-2013. Using Panel Smooth Transition Regression (PSTR), difference and system generalized methods of moment models, we find two main results. First, remittances have a positive and significant impact on economic growth in developing countries, while aid and foreign direct investments have insignificant impact. Secondly, as far as the nonlinear relationship is concerned, we find two extreme regimes with a sharp shift characterizing the remittance–growth relationship, with respect to conditional variables, where the remittances effects are positive and significant under the first regime and negative or insignificant under the second. Our findings suggest that the nonlinear relationship between remittances and growth mainly depends on financial development and investment, and less on remittance level and consumption.
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https://hal.archives-ouvertes.fr/hal-02107277
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Submitted on : Tuesday, April 23, 2019 - 3:51:58 PM
Last modification on : Wednesday, April 24, 2019 - 1:47:47 AM

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Jude Eggoh, Chrysost Bangake, Gervasio Semedo. Do remittances spur economic growth? Evidence from developing countries. Journal of International Trade and Economic Development, Taylor & Francis (Routledge), 2018, 28 (4), pp.391-418. ⟨10.1080/09638199.2019.1568522⟩. ⟨hal-02107277⟩

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