Theoretical and Applied Economics
No. 4 / 2016 (609), Winter
Does remittance drive economic growth in emerging economies: Evidence from FMOLS and Panel VECM
Indian Institute of Technology Bombay, India
Abstract. 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.
Contents
The influence of fiscal freedom, government effectiveness and human development index on tax evasion in the European Union
Limitation of ARIMA models in financial and monetary economics
The Romania's challenges regarding the integration in the Euro Area
Does remittance drive economic growth in emerging economies: Evidence from FMOLS and Panel VECM
Effectiveness of monetary policies in OECD countries
Determinants of household loans
Tourism and economic structural change with endogenous wealth and human capital and elastic labor supply
Migration – trade nexus revisited: Empirical evidence from Turkish emigrants in OECD countries
New pillars of the banking business model or a new model of doing banking?
Effects of R&D and innovation on income in EU countries: new generation panel cointegration and causality analysis
The major economic evolution of Romania by the middle of 2016
Foreign aid, macroeconomic policies and economic growth nexus in India: An ARDL bounds testing approach
Human nature in the economic behavior based on the neoclassical economic model
Determinants of nonperforming assets-bank-specific and macroeconomic factors: A panel data analysis of different group of commercial banks operating in India
Gradualistic strategy of transition to market economy
Financial liberalization and economic growth: Evidence from Tunisia
Public target space as key factor for public policy implementation
The relationships among the returns of investment instruments: a vector autoregressive approach for Turkey
Current account sustainability in SAARC economies: Evidence from combined cointegration approach
Information asymmetry and technical efficiency: Case of a panel of Tunisian insurance companies
FDI and export spillovers using Heckman’s two step approach: Evidence from Turkish manufacturing data