Remittances, Institutions and Growth: A Semiparametric Study

Isabel Ruiz (), Elias Shukralla and Carlos Vargas-Silva ()

International Economic Journal, 2009, vol. 23, issue 1, pages 111-119

Abstract: In this article we re-examine the relationship between remittances and economic growth placing special attention on the nonlinearity of this relationship. Previous studies have ignored the non-linearity of the relationship between remittances and economic growth or have used a quadratic term to capture nonlinearity. We show that the relationship between remittances and growth is neither linear nor quadratic and propose the use of a semiparametric model to avoid the risk of misspecification bias from imposing an arbitrary functional form. We find evidence of a positive relationship between remittances and growth in parametric estimations; however, such a relationship disappears when nonlinearity is taken into account using non-parametric techniques.

Keywords: Migration; remittances; economic growth (search for similar items in EconPapers)
Date: 2009

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Persistent link: http://EconPapers.repec.org/RePEc:taf:intecj:v:23:y:2009:i:1:p:111-119

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