EconPapers    
Economics at your fingertips  
 

Does institutional quality and remittances inflow crowd-in private investment to avoid Dutch Disease? A case for emerging seven (E7) economies

Chi-Wei Su, Tiezhu Sun, Shabbir Ahmad and Nawazish Mirza

Resources Policy, 2021, vol. 72, issue C

Abstract: This study investigates the role of remittances and institutional quality in promoting private investment for emerging seven (E7) economies. This study further analyzes whether the private investment is crow-out due to Dutch disease phenomena or a crow-in. This study uses advanced panel data econometric tools to achieve the study's desired objectives, i.e., Pesaran second-generation unit root test, Westerlund cointegration, and cross-sectionally augmented ARDL for the period 1990–2019. Moreover, this study also added an interactive term for remittance inflow and institutional quality to see both terms' joint effect. Similarly, the role of gross domestic product and financial risk is also analyzed in this study. This study's outcomes show that increasing remittance inflow does cause Dutch disease; however, improvement in institutional quality and its joint effect with remittance inflow on private investment is positive and nullifies the phenomena of Dutch disease. Moreover, an increasing gross domestic product causes private investment to grow. On the other hand, increasing financial risk in emerging seven economies cause private investment to decline. Based on our empirical findings, this study indicates that improvement in institutional quality and channelizing inflow of remittance, and overcoming financial risk shall help promote private investment in these countries.

Keywords: Dutch disease; Financial risk; Institutional quality; Remittances inflow; Investment (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (32)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301420721001252
Full text for ScienceDirect subscribers only

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:eee:jrpoli:v:72:y:2021:i:c:s0301420721001252

DOI: 10.1016/j.resourpol.2021.102111

Access Statistics for this article

Resources Policy is currently edited by R. G. Eggert

More articles in Resources Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu (repec@elsevier.com).

 
Page updated 2024-12-28
Handle: RePEc:eee:jrpoli:v:72:y:2021:i:c:s0301420721001252