Growth effects of remittances in developing countries: A growth accounting approach

Pablo A. Garcia-Fuentes, P. Lynn Kennedy and Gustavo F.C. Ferreira

Emerging Markets Review, 2025, vol. 67, issue C

Abstract: This paper examines the growth effects of remittances using a panel of 103 countries over the period 1990–2019. It uses growth accounting methods and addresses the endogeneity of remittances by introducing external instruments based on economic indicators of the remittance sending-countries. It finds a robust remittance positive effect on growth in remittance-receiving countries. For the average country, an increase of one percentage point in remittances as share of GDP (from 4.16% to 5.46%) increases growth by 0.16%. Additionally, estimations based on the models in Chami et al. (2005), Barajas et al. (2009), and Senbeta (2013) show that remittances promote growth.

Keywords: Economic growth; Developing countries; Growth accounting; Remittances (search for similar items in EconPapers)
JEL-codes: F22 F24 F43 O15 O47 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:67:y:2025:i:c:s1566014125000524

DOI: 10.1016/j.ememar.2025.101303

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