Does remittance drive economic growth in emerging economies: Evidence from FMOLS and Panel VECM
The study investigates the dynamic relationship among remittances, export, exchange rate and economic growth in emerging (Brazil, Russian Federation, India, China and South Africa) economies using balanced panel data ranging from 1994-2013. Data for all variables have been extracted from World Bank...
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| Format: | Article |
| Language: | English |
| Published: |
General Association of Economists from Romania
2016-12-01
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| Series: | Theoretical and Applied Economics |
| Subjects: | |
| Online Access: |
http://store.ectap.ro/articole/1224.pdf
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| Summary: | The study investigates the dynamic relationship among remittances, export,
exchange rate and economic growth in emerging (Brazil, Russian Federation, India, China
and South Africa) economies using balanced panel data ranging from 1994-2013. Data for
all variables have been extracted from World Bank Indicators in terms of US$. The
Multivariate Panel Cointegration technique results demonstrate the existence of long run
equilibrium relationships among observed variables. Employing the Fully Modified OLS
Model (FMOLS), the study finds that remittances have significant negative impact on
economic growth in Brazil, Russian Federation and India. However, remittances have
significantly positive impact on economic growth in China. As a group FMOLS extends
negative impact of remittances on economic growth across the selected emerging
economies. Panel Vector Error Correction Model (PVCEM) has been adopted to show the
long run and short run causality among the variables across the countries. The PVECM
result reveals that there is a long-run causal relationship running from export and
remittances to economic growth. |
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| ISSN: | 1841-8678 1844-0029 |