IDEAS home Printed from https://ideas.repec.org/a/bpj/glecon/v13y2017i1p12n4.html
   My bibliography  Save this article

Impact of Remittances on Economic Growth in Developing Countries: The Role of Openness

Author

Listed:
  • Ghosh Dastidar Sayantan

    (Economics and Finance Division, University of Derby, Derby, United Kingdom of Great Britain and Northern Ireland)

Abstract

The paper examines the empirical relationship between remittances and economic growth for a sample of 62 developing countries over the time period 1990–2014. Remittances seem to promote growth only in the ‘more open’ countries. That is because remittances are in themselves not sufficient for growth. The extent of the benefit depends on domestic institutions and macroeconomic environment in the receiving country. Unlike the ‘less open’ countries, ‘more open’ countries have better institutions and better financial markets to take advantage of the remittances income and channelise them into profitable investments which, in turn, accelerates the rate of economic growth in these countries.

Suggested Citation

  • Ghosh Dastidar Sayantan, 2017. "Impact of Remittances on Economic Growth in Developing Countries: The Role of Openness," Global Economy Journal, De Gruyter, vol. 17(2), pages 1-12, June.
    • Handle: RePEc:bpj:glecon:v:13:y:2017:i:1:p:12:n:4
    DOI: 10.1515/gej-2016-0066
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/gej-2016-0066
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/gej-2016-0066?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Badi Baltagi & Panicos Demetriades & Siong Hook Law, 2007. "Financial Development, Openness and Institutions: Evidence from Panel Data," Money Macro and Finance (MMF) Research Group Conference 2006 166, Money Macro and Finance Research Group.
    2. Ms. Dalia S Hakura & Mr. Ralph Chami & Mr. Peter J Montiel, 2009. "Remittances: An Automatic Output Stabilizer?," IMF Working Papers 2009/091, International Monetary Fund.
    3. Balasubramanyam, V N & Salisu, M & Sapsford, David, 1996. "Foreign Direct Investment and Growth in EP and IS Countries," Economic Journal, Royal Economic Society, vol. 106(434), pages 92-105, January.
    4. Connel Fullenkamp & Mr. Thomas F. Cosimano & Michael T. Gapen & Mr. Ralph Chami & Mr. Peter J Montiel & Mr. Adolfo Barajas, 2008. "Macroeconomic Consequences of Remittances," IMF Occasional Papers 2008/001, International Monetary Fund.
    5. Ahalya Balasubramanyam & Vudayagi Balasubramanyam, 2015. "Kerala and Tamil Nadu," Working Papers 75761747, Lancaster University Management School, Economics Department.
    6. Wong Hock Tsen, 2006. "Granger causality tests among openness to international trade, human capital accumulation and economic growth in China: 1952-1999," International Economic Journal, Taylor & Francis Journals, vol. 20(3), pages 285-302.
    7. Siong Hook Law, 2007. "Openness and Financial Development," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 6(2), pages 145-165, May.
    8. Ralph Chami & Connel Fullenkamp & Samir Jahjah, 2005. "Are Immigrant Remittance Flows a Source of Capital for Development?," IMF Staff Papers, Palgrave Macmillan, vol. 52(1), pages 55-81, April.
    9. Monojit Chatterji & Sushil Mohan & Sayantan Ghosh Dastidar, 2014. "Relationship Between Trade Openness And Economic Growth Of India: A Time Series Analysis," Journal of Academic Research in Economics, Spiru Haret University, Faculty of Accounting and Financial Management Constanta, vol. 6(1 (March)), pages 45-69.
    10. Mr. Antonio David & Mr. Montfort Mlachila & Ashwin Moheeput, 2014. "Does Openness Matter for Financial Development in Africa?," IMF Working Papers 2014/094, International Monetary Fund.
    11. Vito Tanzi, 1998. "Corruption Around the World: Causes, Consequences, Scope, and Cures," IMF Staff Papers, Palgrave Macmillan, vol. 45(4), pages 559-594, December.
    12. Valerie Kozel & Harold Alderman, 1990. "Factors Determining Work Participation and Labour Supply Decisions in Pakistan's Urban Areas," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 29(1), pages 1-18.
    13. Catrinescu, Natalia & Leon-Ledesma, Miguel & Piracha, Matloob & Quillin, Bryce, 2009. "Remittances, Institutions, and Economic Growth," World Development, Elsevier, vol. 37(1), pages 81-92, January.
    14. Bichaka Fayissa & Christian Nsiah, 2010. "Can Remittances Spur Economic Growth and Development? Evidence from Latin American Countries (LACs)," Working Papers 201006, Middle Tennessee State University, Department of Economics and Finance.
    15. Agarwal, Reena & Horowitz, Andrew W., 2002. "Are International Remittances Altruism or Insurance? Evidence from Guyana Using Multiple-Migrant Households," World Development, Elsevier, vol. 30(11), pages 2033-2044, November.
    16. Mr. Vito Tanzi, 1998. "Corruption Around the World: Causes, Consequences, Scope, and Cures," IMF Working Papers 1998/063, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. S. Nyasha & N.M. Odhiambo, 2022. "The impact of remittances on economic growth: empirical evidence from South Africa," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 15(2), pages 254-272.
    2. Waliu O. Shittu & Gazi M. Hassan & Frank G. Scrimgeour, 2023. "COVID-19 and the Role of Remittances on Sustainable Development: Insights from Sub-Saharan Africa," Working Papers in Economics 23/05, University of Waikato.
    3. Byaro, Mwoya & Pelizzo, Riccardo & Kinyondo, Abel, 2023. "What are the Main Drivers Behind the Acceleration of Tanzania's Economic Growth Over the Past Three Decades?," African Journal of Economic Review, African Journal of Economic Review, vol. 11(4), June.
    4. S G Dastidar & N Apergis, 2022. "Do Remittances Promote Economic Growth? New Evidence from India," Economic Issues Journal Articles, Economic Issues, vol. 27(1), pages 11-37, March.
    5. S. Nyasha & N.M. Odhiambo, 2021. "The Impact of Remittances on Economic Growth: Empirical Evidence from South Africa," Working Papers AESRI-2021-21, African Economic and Social Research Institute (AESRI), revised Jan 2021.
    6. Tahir, Muhammad & Estrada, Mario Arturo Ruiz & Afridi, Muhammad Asim, 2019. "Foreign inflows and economic growth: An emiprical study of the SAARC region," Economic Systems, Elsevier, vol. 43(3).
    7. Ofori, Isaac K. & Gbolonyo, Emmanuel Y. & Toyo Dossou, Marcel A. & Nkrumah, Richard K. & Nkansah, Emmanuel, 2023. "Towards inclusive growth in Africa: Remittances, and financial development interactive effects and thresholds," Journal of Multinational Financial Management, Elsevier, vol. 68(C).
    8. Akinwumi Sharimakin & Rasheed O. Alao & Oluseyi Omosuyi, 2024. "Foreign remittances, deprivation and patriotism," Quality & Quantity: International Journal of Methodology, Springer, vol. 58(1), pages 753-780, February.

    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. Ziesemer, Thomas H.W., 2012. "Worker remittances, migration, accumulation and growth in poor developing countries: Survey and analysis of direct and indirect effects," Economic Modelling, Elsevier, vol. 29(2), pages 103-118.
    2. Balli, Faruk & Rana, Faisal, 2015. "Determinants of risk sharing through remittances," Journal of Banking & Finance, Elsevier, vol. 55(C), pages 107-116.
    3. Gloria Clarissa O. Dzeha, 2016. "The decipher, theory or empirics: a review of remittance studies," African Journal of Accounting, Auditing and Finance, Inderscience Enterprises Ltd, vol. 5(2), pages 113-134.
    4. Sami Ben Mim & Fatma Mabrouk, 2011. "Remittances and economic growth: what channels of transmission? (In French)," Cahiers du GREThA (2007-2019) 2011-28, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    5. D. Tung, 2015. "Remittances And Economic Growth In Vietnam: An Ardl Bounds Testing Approach," Review of Business and Economics Studies // Review of Business and Economics Studies, Финансовый Университет // Financial University, vol. 3(1), pages 80-88.
    6. Gazi Mainul Hassan & Shamim Shakur, 2017. "Nonlinear Effects of Remittances on Per Capita GDP Growth in Bangladesh," Economies, MDPI, vol. 5(3), pages 1-11, July.
    7. Michael Clemens and Timothy N. Ogden, 2014. "Migration as a Strategy for Household Finance: A Research Agenda on Remittances, Payments, and Development- Working Paper 354," Working Papers 354, Center for Global Development.
    8. Faruk Balli & Faisal Rana, 2014. "Determinants of risk sharing through remittances: cross-country evidence," CAMA Working Papers 2014-12, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    9. repec:dgr:unumer:2008063 is not listed on IDEAS
    10. Arusha Cooray & Nabamita Dutta & Sushanta Mallick, 2016. "Does female human capital formation matter for the income effect of remittances? Evidence from developing countries," Oxford Development Studies, Taylor & Francis Journals, vol. 44(4), pages 458-478, October.
    11. Gnangnon, Sèna Kimm, 2014. "The Effect of Development Aid Unpredictability and Migrants’ Remittances on Fiscal Consolidation in Developing Countries," World Development, Elsevier, vol. 54(C), pages 168-190.
    12. Ma, Yechi & Chen, Zhiguo & Shinwari, Riazullah & Khan, Zeeshan, 2021. "Financialization, globalization, and Dutch disease: Is Dutch disease exist for resources rich countries?," Resources Policy, Elsevier, vol. 72(C).
    13. Christian EBEKE, 2010. "Remittances, Value Added Tax and Tax Revenue in Developing Countries," Working Papers 201030, CERDI.
    14. Roland Kangni KPODAR & Maëlan LE GOFF, 2012. "Do Remittances Reduce Aid Dependency?," Working Papers P34, FERDI.
    15. repec:hal:cesptp:halshs-00826999 is not listed on IDEAS
    16. Kose, M. Ayhan & Prasad, Eswar & Rogoff, Kenneth & Wei, Shang-Jin, 2010. "Financial Globalization and Economic Policies," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4283-4359, Elsevier.
    17. Ustarz, Yazidu & Haruna, Issahaku, 2017. "International Migrant Remittance and Productivity Growth in Ghana," MPRA Paper 101579, University Library of Munich, Germany, revised 18 Jun 2017.
    18. Jean Louis Combes & Christian Ebeke & Mathilde Maurel, 2015. "The effect of remittances prior to an election," Applied Economics, Taylor & Francis Journals, vol. 47(38), pages 4074-4089, August.
    19. Adams, Samuel & Klobodu, Edem Kwame Mensah, 2016. "Remittances, regime durability and economic growth in Sub-Saharan Africa (SSA)," Economic Analysis and Policy, Elsevier, vol. 50(C), pages 1-8.
    20. Ms. Kimberly Beaton & Ms. Svetlana Cerovic & Misael Galdamez & Metodij Hadzi-Vaskov & Franz Loyola & Zsoka Koczan & Mr. Bogdan Lissovolik & Mr. Jan Kees Martijn & Ms. Yulia Ustyugova & Joyce Wong, 2017. "Migration and Remittances in Latin America and the Caribbean: Engines of Growth and Macroeconomic Stabilizers?," IMF Working Papers 2017/144, International Monetary Fund.
    21. Christian EBEKE, 2010. "Transferts des migrants, ouverture sur l'extérieur et dépenses publiques dans les pays en développement," Working Papers 201011, CERDI.
    22. Martin-Mayoral, Fernando & Proaño, Maria Belén, 2012. "Las remesas en América Latina, ¿amenaza u oportunidad? [Remittances in Latin America, a threat or an opportunity?]," MPRA Paper 43730, University Library of Munich, Germany.

    More about this item

    Keywords

    remittances; economic growth; openness; developing countries; panel data;
    All these keywords.

    JEL classification:

    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development

    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:bpj:glecon:v:13:y:2017:i:1:p:12:n:4. 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: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    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.