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Asymmetric Relationship between Institutional Quality and Remittance Inflows: Empirical Evidence for Turkey

Author

Listed:
  • Özşahin, Şerife

    (Necmettin Erbakan University)

  • Üçler, Gülbahar

    (Ahi Evran University)

Abstract

This study aims to examine the asymmetric causal relationship between the institutional quality index and remittance inflows in Turkey using the monthly data for the period between January 1985 and December 2014. To this end, the institutional quality index is formulated based on the eight different institutional quality indicators released by ICRG (International Country Risk Guide). Stationarity analyses of the variables are conducted with the LM two structural breaks unit root test developed by Lee and Strazicich (2003), while the existence of asymmetric causal relationship is examined with Hatemi-J (2012) asymmetric causality test. The findings obtained from the asymmetric causality test reveal that the improvement in the level of institutional quality does not affect remittance positively, whereas negative shocks in the level of institutional quality cause a negative shock in remittance inflows.

Suggested Citation

  • Özşahin, Şerife & Üçler, Gülbahar, 2017. "Asymmetric Relationship between Institutional Quality and Remittance Inflows: Empirical Evidence for Turkey," Bulletin of Economic Theory and Analysis, BETA Journals, vol. 2(3), pages 189-204, July-Sept.
    • Handle: RePEc:ris:betajl:0014
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    More about this item

    Keywords

    Remittance Inflows; Institutional Quality; ICRG; Hatemi-J (2012) Asymmetric Causality Test;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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