Is the Relationship between Remittances and Economic Growth Influenced by the Governance and Development of the Financial Sector? New Evidence from the Developing Countries

Adnan Khurshid (), Yin Kedong, Adrian Cantemir Calin, Cristina Zeldea, Sun Qiang and Duan Wenqi
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Adnan Khurshid: School of Economics and Management, Zhejiang Normal University, Jinhua, Zhejiang. North China University of Technology, Beijing, China. Corresponding author.
Yin Kedong: College of Economics, Department of Finance, Ocean University of China
Sun Qiang: North China University of Technology, Beijing, China.
Duan Wenqi: School of Economics and Management, Zhejiang Normal University, Jinhua, Zhejiang.

Journal for Economic Forecasting, 2020, issue 1, 37-56

Abstract: We examine the remittances-growth relationship and its interaction with governance and financial development using the System GMM along with the bootstrap panel Granger causality approach. The analysis covers 58 countries divided into low, lower-middle and middle-income economies. The results reveal that remittances and their interaction with financial development have a positive effect on economic growth within all income groups. However, the interaction between remittances and governance is mainly supporting growth in middle-income countries. The bootstrap panel Granger causality approach finds deeper evidence of causality running from remittances to growth in the low and lower-middle-income groups, but weak evidence is provided for the middle-income countries. We find the causality relationships to be idiosyncratic as their sign and direction vary within the groups

Keywords: worker’s remittances; financial development; financial institutions; governance; economic growth; bootstrap panel causality test (search for similar items in EconPapers)
JEL-codes: C22 C32 F24 O16 O43 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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