Remittance and growth nexus: bootstrap panel granger-causality evidence from high remittance receiving countries

Hamisu Sadi Ali, Siong Hook Law, Zulkornain Yusop, Veton Zeqiraj, Yusuf Ibrahim Kofarmata and Fatima Muhammad Abdulkarim

International Journal of Economics and Business Research, 2018, vol. 15, issue 3, 312-324

Abstract: The present paper examine the causal relationship between economic growth and remittances among the top ten highest remittance recipient countries in the world based on remittance to GDP ratio (Haiti, Honduras, Kyrgyz Republic, Lebanon, Lesotho, Moldova, Nepal, Samoa, Tajikistan, and Tonga). We applied Konya (2006) Bootstrap panel Granger-causality test technique for the period of 1998-2014. The result shows that, for countries like Honduras, Kyrgyz Republic, Lebanon, and Moldova, inflow of remittances causes economic growth, while economic growth causes remittance inflows in the case of Lesotho, Nepal, Samoa, and Tajikistan. However, bidirectional causality exists in the case of Haiti whereby remittances cause economic growth and vice-versa. Hence, the results reveal that, the causality between the two variables is both one way causality that run from remittances to growth and the other segment that run from economic growth to remittances, therefore the result is mainly country specific.

Keywords: remittances; economic growth; granger-causality; Konya; cross-sectional dependence. (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijecbr:v:15:y:2018:i:3:p:312-324

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