Is There a Link between Remittances, Capital Formation, Structural Transformation and Economic Growth? A Dynamic Panel Analysis for Latin America under the PVAR Approach

Eduardo Germán Zurita Moreano, María Gabriela González Bautista (), Juan Vallejo-Mata and Víctor Dante Ayaviri-Nina
Additional contact information
Eduardo Germán Zurita Moreano: Department of Economics, Faculty of Political and Administrative Sciences, Universidad Nacional de Chimborazo, Riobamba 060110, Ecuador
María Gabriela González Bautista: Department of Economics, Faculty of Political and Administrative Sciences, Universidad Nacional de Chimborazo, Riobamba 060110, Ecuador
Víctor Dante Ayaviri-Nina: Department of Economics, Faculty of Political and Administrative Sciences, Universidad Nacional de Chimborazo, Riobamba 060110, Ecuador

Economies, 2024, vol. 12, issue 5, 1-25

Abstract: The literature has mainly focused on analyzing the relationship of remittances with economic growth and social welfare, neglecting more complex aspects where remittances can have relevant implications. To contribute to the literature, the objective of this research is to examine the dynamic relationship between remittances, capital formation, structural transformation and economic growth in 15 Latin American countries during the period 1996–2019. To meet the objective, a panel vector autoregressive regression (PVAR) model was estimated, focusing on the analysis of the impulse-response function and variance decomposition. The results show a positive effect of remittances on economic growth and capital formation and a negative effect of remittances on structural transformation for initial periods and positive for later periods, framing a non-linear relationship. In addition, it was determined that structural transformation does not have a significant impact on economic growth. Finally, it was found that capital formation has a partial positive effect on economic growth. It is concluded that public policies should generate support mechanisms for the efficient channeling of these resources so that they become engines of growth.

Keywords: remittances; capital formation; structural transformation; economic growth; PVAR (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2227-7099/12/5/109/pdf (application/pdf)
https://www.mdpi.com/2227-7099/12/5/109/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jecomi:v:12:y:2024:i:5:p:109-:d:1389280

Access Statistics for this article

Economies is currently edited by Ms. Adore Zhou

More articles in Economies from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().