The interactive effect of remittances and civil liberties on investment and consumption
Jeffrey Edwards and
Jennis Biser ()
International Journal of Development Issues, 2011, vol. 10, issue 1, 20-33
Purpose - The purpose of this paper is to investigate the level of influence that civil liberties has on the marginal effect of remittances on gross domestic investment and consumption separately and measures it across all levels of civil liberties. Design/methodology/approach - The authors employ a two-stage system generalized method of moments procedure and the civil liberties subset of the Freedom in the World Index as a proxy for civil liberty. Findings - The findings indicate a substitution effect from investment to consumption as civil liberties deteriorate for developing south economies, though not for emerging economies. In addition, the marginal effect of remittances on investment diminishes less quickly as economies become less free than it increases for consumption indicating that the substitution is not quite one-for-one. Practical implications - Economies with low levels of civil liberties could benefit by improving them in ways that would encourage recipients to channel remittances into investment rather than consumption. Originality/value - This paper differs from previous research in that the authors evaluate investment and consumption separately rather than embedding these component parts within growth. In addition, when interactions are employed in existing literature, the inference drawn is static with regard to the varying degrees of institutional development. Third, none of the prior studies directly explores civil liberties proper; they usually aggregate civil liberties with other aspects of political or economic freedom.
Keywords: Investments; Consumption; Civil and political rights; Developing countries (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
http://www.emeraldinsight.com/10.1108/144689511111 ... RePEc&WT.mc_id=RePEc (text/html)
Access to full text is restricted to subscribers
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eme:ijdipp:v:10:y:2011:i:1:p:20-33
Ordering information: This journal article can be ordered from
Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
Access Statistics for this article
International Journal of Development Issues is currently edited by Dr Dilip Dutta
More articles in International Journal of Development Issues from Emerald Group Publishing
Bibliographic data for series maintained by Virginia Chapman ().