Asymmetric Relationship between Institutional Quality and Remittance Inflows: Empirical Evidence for Turkey

Şerife Özşahin () and Gülbahar Üçler ()
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Şerife Özşahin: Necmettin Erbakan University, Postal: Necmettin Erbakan University, FEAS, Department of Economics, Konya, TURKEY

Bulletin of Economic Theory and Analysis, 2017, vol. 2, issue 3, 189-204

Abstract: This study aims to examine the asymmetric causal relationship between the institutional quality index and remittance inflows in Turkey using the monthly data for the period between January 1985 and December 2014. To this end, the institutional quality index is formulated based on the eight different institutional quality indicators released by ICRG (International Country Risk Guide). Stationarity analyses of the variables are conducted with the LM two structural breaks unit root test developed by Lee and Strazicich (2003), while the existence of asymmetric causal relationship is examined with Hatemi-J (2012) asymmetric causality test. The findings obtained from the asymmetric causality test reveal that the improvement in the level of institutional quality does not affect remittance positively, whereas negative shocks in the level of institutional quality cause a negative shock in remittance inflows.

Keywords: Remittance Inflows; Institutional Quality; ICRG; Hatemi-J (2012) Asymmetric Causality Test (search for similar items in EconPapers)
JEL-codes: C22 F24 O53 (search for similar items in EconPapers)
Date: 2017
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