FDI or Remittances for Sustainable External Financial Inflows. Theoretical Delimitations and Practical Evidence using Granger Causality

Valentina Vasile (), Daniel Ştefan (), Calin-Adrian Comes (), Elena Bunduchi and Anamari-Beatrice Ştefan ()
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Daniel Ştefan: „G.E.Palade” University of Medicine, Pharmacy, Sciences and Technologies of Târgu Mureș; Institute of National Economy, Romanian Academy.
Anamari-Beatrice Ştefan: „G.E.Palade” University of Medicine, Pharmacy, Sciences and Technologies of Târgu Mureș.

Journal for Economic Forecasting, 2020, issue 4, 131-153

Abstract: FDI and remittances are important sources of economic growth, depending both on national push policies and on the individuals’ and companies’ interests. The problem approached in this paper is the extent to which FDI inflows in migrant origin countries influence the level, dynamics and sustainability of the remittances received by the households, and whether or not the level of economic development has importance in politicy measures differenciation in the analyzed period (1996-2019). In the present study, based on Dumitrescu-Hurlin Panel Granger causality approach, we highlight to what extent the level of development of the origin country influences the employment decision, namely external mobility for work or employment in the FDI companies. Studying the dependence between FDI stock dynamics and remittances inflows evolution in beneficiary countries, we point: (1) if the attractiveness for FDI in the origin country attenuates the dynamics of the external mobility of the working age population, (2) to which extent a country's GDP/capita level influence the attractiveness for FDI inflows and the level of remittances sent by migrants in the origin countries (3) if the advancement index of the FDI stock dynamics relative to the remittances inflows can be appreciated as a marker for policy measures differentiation in the field of labour market for retaining human capital.

Keywords: economic growth; FDI; remittances; Dumitrescu-Hurlin Granger Panel causality (search for similar items in EconPapers)
JEL-codes: C33 F21 F24 F43 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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