Remittances and Economic Growth in Africa, Asia, and Latin American-Caribbean Countries: A Panel Unit Root and Panel Cointegration Analysis

Bichaka Fayissa and Christian Nsiah

No 201103, Working Papers from Middle Tennessee State University, Department of Economics and Finance

Abstract: This study estimates the macroeconomic impact of remittances and some control variables such as openness of the economy, capital/labor ratio, and economic freedom on the economic growth of African, Asian, and Latin American-Caribbean countries using newly developed panel unit-root tests, cointegration tests, and Panel Fully Modified OLS (PFMOLS). We use annual panel data from 1985- 2007for 64 countries consisting of 29 from Africa, 14 from Asia, and 21 from Latin America and the Caribbean region, respectively. We find that remittances, openness of the economy, and capital labor ratio have positive and significant effect on economic growth for all regions as a group and in each of the three in study. While the economic freedom index also has a positive and significant effect on growth in Africa and Latin America, however, its effect on the economic growth of Asia is mixed.

Keywords: Workers’ Remittances; Economic Growth; Unit-Root tests; Error Correction Model; PFMOLS; Panel Data; Africa; Asia; Latin America/Caribbean (search for similar items in EconPapers)
JEL-codes: E21 F21 G22 J61 O16 (search for similar items in EconPapers)
Date: 2011-06
New Economics Papers: this item is included in nep-afr, nep-fdg, nep-mac, nep-mig and nep-sea
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Citations: View citations in EconPapers (10)

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Related works:
Journal Article: Remittances and economic growth in Africa, Asia, and Latin American-Caribbean countries: a panel unit root and panel cointegration analysis (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:mts:wpaper:201103

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