IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v7y2023i8p569-605.html
   My bibliography  Save this article

Impact of Migration and Remittances on Economic Growth in Nigeria

Author

Listed:
  • Imouokhome Peter Afen-Okhai

    (University of Lagos, Nigeria)

Abstract

Remittance flows have the potential to greatly improve the livelihoods of receiving households by smoothing their consumption and enabling investments back home. They can facilitate economic stability, improve creditworthiness, and attract investments to promote economic growth and reduce poverty rates for recipient nations. From World Bank Statistics, Nigeria was 8th on the list of top remittances from low and middle-income countries. The study has undertaken the investigation of a relationship between economic growth and remittance. The economic growth variable used in this study is proxy by GDP while explanatory variables are remittance, trade openness, foreign direct investment, government expenditure, capital formation. The study also investigated the causality among the variables used in the study. Using The ARDL estimation technique owing to the stationarity of all the variables at both level, first differencing and void of second difference series, the result of this analysis confirmed the presence of long run convergence among the variables under consideration. The short run result was presented was evident that remittance has a positive and statistically impact on economic growth under the period of study. However the result shows that there is presence of a long run convergence among the selected variables and the respective dependent variables. This suggests that there is a presence of long run relationship among the variables in consideration. Having confirmed the presence of long run convergence among the variables under consideration, the short run result was presented above which is evident that remittance have a positive and statistically impact on economic growth under the period of study. The long run estimates reveal that government spending has a positive and significant impact on economic growth. Moreover, it was deduced from the regression result conducted that trade openness and foreign direct investment has a positive impact on economic growth under the period of study. There was found a uni direction between the two variables. It is revealed that remittances does not cause changes in economic growth under the period of study. This was further supported by the regression result of positive relationship between government spending and economic growth under the period of study. It was therefore recommended that the Nigerian government should budget and expend more resources on productive sector of the economy especially on infrastructure which would attract the right Foreign Direct Investment (FDI) into the country and boost more growth. Also, the Nigerian government should set up a body to review the spending and allocation of remittances into the country and an independent commission be set up by the federal government to be saddled with the responsibility of coordinating and harnessing remittance flows into the country.

Suggested Citation

  • Imouokhome Peter Afen-Okhai, 2023. "Impact of Migration and Remittances on Economic Growth in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(8), pages 569-605, August.
    • Handle: RePEc:bcp:journl:v:7:y:2023:i:8:p:569-605
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-7-issue-8/569-605.pdf
    Download Restriction: no
    File URL: https://www.rsisinternational.org/journals/ijriss/articles/impact-of-migration-and-remittances-on-economic-growth-in-nigeria/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    3. Stark, Oded & Bloom, David E, 1985. "The New Economics of Labor Migration," American Economic Review, American Economic Association, vol. 75(2), pages 173-178, May.
    4. Samuel Munzele Maimbo & Dilip Ratha, 2005. "Remittances: Development Impact and Future Prospects," World Bank Publications - Books, The World Bank Group, number 7339.
    5. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    6. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    7. Schultz, Theodore W., 1979. "The Economics of Being Poor," Nobel Prize in Economics documents 1979-1, Nobel Prize Committee.
    8. Jørgen Carling, 2008. "The determinants of migrant remittances," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 24(3), pages 582-599, Autumn.
    9. P., Srinivasan & M., Kalaivani, 2012. "Exchange Rate Volatility and Export Growth in India: An Empirical Investigation," MPRA Paper 43828, University Library of Munich, Germany.
    10. Ebele Stella Nwokoye & Clement Izuchukwu Igbanugo & Stephen Kelechi Dimnwobi, 2020. "International migrant remittances and labour force participation in Nigeria," African Development Review, African Development Bank, vol. 32(2), pages 125-137, June.
    11. Nyamongo, Esman Morekwa & Misati, Roseline N. & Kipyegon, Leonard & Ndirangu, Lydia, 2012. "Remittances, financial development and economic growth in Africa," Journal of Economics and Business, Elsevier, vol. 64(3), pages 240-260.
    12. Lim, Sokchea & Simmons, Walter O., 2015. "Do remittances promote economic growth in the Caribbean Community and Common Market?," Journal of Economics and Business, Elsevier, vol. 77(C), pages 42-59.
    13. Adegbite, Olayinka O. & Machethe, Charles L., 2020. "Bridging the financial inclusion gender gap in smallholder agriculture in Nigeria: An untapped potential for sustainable development," World Development, Elsevier, vol. 127(C).
    14. Michael T. Gapen & Mr. Ralph Chami & Mr. Peter J Montiel & Mr. Adolfo Barajas & Connel Fullenkamp, 2009. "Do Workers’ Remittances Promote Economic Growth?," IMF Working Papers 2009/153, International Monetary Fund.
    15. Larry A. Sjaastad, 1970. "The Costs and Returns of Human Migration," Palgrave Macmillan Books, in: Harry W. Richardson (ed.), Regional Economics, chapter 9, pages 115-133, Palgrave Macmillan.
    16. Stark, Oded & Taylor, J Edward, 1991. "Migration Incentives, Migration Types: The Role of Relative Deprivation," Economic Journal, Royal Economic Society, vol. 101(408), pages 1163-1178, September.
    17. Olumuyiwa Tolulope Apanisile, 2021. "Remittances, financial development and the effectiveness of monetary policy transmission mechanism in Nigeria: a DSGE approach (1986–2018)," Indian Economic Review, Springer, vol. 56(1), pages 91-112, June.
    18. Lucas, Robert E B & Stark, Oded, 1985. "Motivations to Remit: Evidence from Botswana," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 901-918, October.
    19. Miguel Ramirez, 2013. "Do Financial and Institutional Variables Enhance the Impact of Remittances on Economic Growth in Latin America and the Caribbean? A Panel Cointegration Analysis," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 19(3), pages 273-288, August.
    20. Peter Quartey & Charles Ackah & Monica Puoma Lambon-Quayefio, 2018. "Inter-linkages between remittance and savings in Ghana," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 46(1), pages 152-166, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ibrahim Sirkeci & Jeffrey H. Cohen & Dilip Ratha, 2012. "Migration and Remittances during the Global Financial Crisis and Beyond," World Bank Publications - Books, The World Bank Group, number 13092.
    2. Debelo Bedada Yadeta & Fetene Bogale Hunegnaw, 2022. "Effect of International Remittance on Economic Growth: Empirical Evidence from Ethiopia," Journal of International Migration and Integration, Springer, vol. 23(2), pages 383-402, June.
    3. Imen Mohamed Sghaier, 2021. "Foreign Financial Flows, Human Capital and Economic Growth in North African Countries," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 3, pages 355-371, September.
    4. Amit Nandan & Hrushikesh Mallick, 2022. "Do growth-promoting factors induce income inequality in a transitioning large developing economy? An empirical evidence from Indian states," Economic Change and Restructuring, Springer, vol. 55(2), pages 1109-1139, May.
    5. Hagen-Zanker, Jessica, 2010. "Modest expectations: Causes and effects of migration on migrant households in source countries," MPRA Paper 29507, University Library of Munich, Germany.
    6. Naeem AKRAM*, 2017. "Role of Public Debt in Economic Growth of Sri Lanka: An ARDL Approach," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 27(2), pages 189-212.
    7. Boachie, Micheal Kofi, 2015. "Effect of health on economic growth in Ghana:An application of ARDL bounds test to cointegration," MPRA Paper 67201, University Library of Munich, Germany.
    8. Themba G Chirwa & NM Odhiambo, 2019. "An Empirical Test Of Exogenous Growth Models: Evidence From Three Southern African Countries," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 64(220), pages 7-38, January –.
    9. Oussama Elkhalfi & Rachid Chaabita & Kamal Zahraoui & Hicham El Alaoui, 2023. "Public Spending on Human Capital and Economic Growth in Morocco," International Journal of Economics and Financial Issues, Econjournals, vol. 13(4), pages 102-110, July.
    10. Hatice KÜÇÜKKAYA, 2017. "EUREFE’17 International Conference," Turkish Economic Review, KSP Journals, vol. 4(3), pages 343-344, September.
    11. Elena Vitalievna, Lebedeva, 2007. "Determinants of International Migration and Remittances," MPRA Paper 104789, University Library of Munich, Germany, revised 2007.
    12. Sheilla Nyasha & Nicholas M. Odhiambo, 2019. "Government Size and Economic Growth: A Review of International Literature," SAGE Open, , vol. 9(3), pages 21582440198, September.
    13. Kashif Munir & Shahzad Arshad, 2018. "Factor accumulation and economic growth in Pakistan: incorporating human capital," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 45(3), pages 480-491, March.
    14. Wadad Saad & Hassan Ayoub, 2019. "Remittances, Governance and Economic Growth: Empirical Evidence from MENA Region," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 11(8), pages 1-1, August.
    15. Niaz Hussain Ghumro & Mohd Zaini Abd Karim, 2017. "The Role Of Remittances In The Stability Of Money Demand In Pakistan: A Cointegration Analysis," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 62(213), pages 45-66, April - J.
    16. Les Christidis, Les Christidis, 2005. "Theorizing and Conceptualizing of Migration," MPRA Paper 105238, University Library of Munich, Germany, revised 2005.
    17. EL AIDI Abir & MOUSSANE Aboutayeb & TARBALOUTI Essaid, 2024. "The Effects of Technological Innovation on Sustainable Development in Morocco: Does the Transition to Social Innovation Matter?," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(5), pages 901-927, May.
    18. Chrząstowska, Bożena, 2006. "Determinants of International Migration: A Study of Dual Countries Perspectives," MPRA Paper 104689, University Library of Munich, Germany, revised 2006.
    19. Kassey P. Garba & Wasiu Adekunle & Oluwatosin Adeniyi, 2020. "Nexus between Foreign Remittances and Economic Growth in Nigeria: Role of the Financial Sector," Asian Journal of Economics and Empirical Research, Asian Online Journal Publishing Group, vol. 7(1), pages 15-24.
    20. Ronald Kumar & Madhukar Singh, 2014. "Role of health expenditure and ICT in a small island economy: a study of Fiji," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(4), pages 2295-2311, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:7:y:2023:i:8:p:569-605. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.