Do personal remittances influence economic growth in South Asia? A panel analysis

This paper investigates the remittance and economic growth relationship using annual panel data for the period 1986–2019 on selected South Asian economies with trade openness (TOP) and foreign direct investment (FDI) inflow as control variables. The cross‐sectional dependency test, second‐generation...

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Bibliographic Details
Published inReview of development economics Vol. 26; no. 1; pp. 242 - 258
Main Author Islam, Md. Saiful
Format Journal Article
LanguageEnglish
Published Oxford Blackwell Publishing Ltd 01.02.2022
Subjects
Causality
Dependency
Economic growth
Exports
foreign direct investment
Foreign investment
Migrants
Migration
Openness
Panel data
Remittances
South Asia
trade openness
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Summary:This paper investigates the remittance and economic growth relationship using annual panel data for the period 1986–2019 on selected South Asian economies with trade openness (TOP) and foreign direct investment (FDI) inflow as control variables. The cross‐sectional dependency test, second‐generation panel unit root test, panel generalized least square (GLS), panel fully modified ordinary least squares (FMOLS), and Dumitrescu–Hurlin (D–H) panel causality tests are employed to accomplish the study. Both the GLS and FMOLS estimations ensure the positive impact of remittance on economic growth. The D–H causality test discloses unidirectional causality from remittances to economic growth. The findings suggest that South Asian economies may strive to attract more remittances, through augmenting international migration, enabling migration‐friendly policy and regimes, creating training and support facilities at different levels for international migrants, diversifying exports, and being selective to FDI inflows, which will take care of economic growth in the region.
Bibliography:Funding information
There is no funding
ISSN:1363-6669
1467-9361
DOI:10.1111/rode.12842