IDEAS home Printed from https://ideas.repec.org/a/taf/oaefxx/v11y2023i2p2243189.html
   My bibliography  Save this article

The impact of remittances on economic growth in Ghana: An ARDL bound test approach

Author

Listed:
  • Abdul-Malik Abdulai

Abstract

International remittances remained one major source of international financial resources in the world. Yet very limited empirical studies exist on the impact of these remittances on economic growth, more especially in Ghana. To bridge this void in literature, the study analyzes the impact of remittances on GDP growth in Ghana from 1990 to 2020. The ARDL estimation technique was used to test the long-run association between the selected variables. The results showed that GDP growth rate has a long-run relationship with remittance inflows, foreign direct investment, unemployment rate, inflation, trade, population growth rate and official development assistance. Lastly, the mediating effect of unemployment on remittance inflows negatively affects GDP growth rate in both runs. It is therefore recommended that to ensure sustained GDP growth rate in Ghana, government should consider tapping into the contribution of remittances by ensuring reliable transfer means and cutting down the cost of transfer.

Suggested Citation

  • Abdul-Malik Abdulai, 2023. "The impact of remittances on economic growth in Ghana: An ARDL bound test approach," Cogent Economics & Finance, Taylor & Francis Journals, vol. 11(2), pages 2243189-224, June.
    • Handle: RePEc:taf:oaefxx:v:11:y:2023:i:2:p:2243189
    DOI: 10.1080/23322039.2023.2243189
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/23322039.2023.2243189
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/23322039.2023.2243189?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 search for a different version of it.

    References listed on IDEAS

    as
    1. Imai, Katsushi S. & Gaiha, Raghav & Ali, Abdilahi & Kaicker, Nidhi, 2014. "Remittances, growth and poverty: New evidence from Asian countries," Journal of Policy Modeling, Elsevier, vol. 36(3), pages 524-538.
    2. George J. Borjas, 2021. "The Economic Benefits from Immigration," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 13, pages 411-430, World Scientific Publishing Co. Pte. Ltd..
    3. 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.
    4. Giuliano, Paola & Ruiz-Arranz, Marta, 2009. "Remittances, financial development, and growth," Journal of Development Economics, Elsevier, vol. 90(1), pages 144-152, September.
    5. Naqeeb Ur Rehman & Eglantina Hysa & Wai Ching Poon, 2021. "The effect of financial development and remittances on economic growth," Cogent Economics & Finance, Taylor & Francis Journals, vol. 9(1), pages 1932060-193, January.
    6. D. O. Olayungbo & Ahmod Quadri, 2019. "Remittances, financial development and economic growth in sub-Saharan African countries: evidence from a PMG-ARDL approach," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 5(1), pages 1-25, December.
    7. Cazachevici, Alina & Havranek, Tomas & Horvath, Roman, 2020. "Remittances and economic growth: A meta-analysis," World Development, Elsevier, vol. 134(C).
    8. Marcella Nicolini & Laura Resmini, 2006. "The Impact of Mnes on Domestic Firms in CEECS: A Micro-Econometric Approach," ERSA conference papers ersa06p411, European Regional Science Association.
    9. Md. Saiful Islam, 2022. "Do personal remittances influence economic growth in South Asia? A panel analysis," Review of Development Economics, Wiley Blackwell, vol. 26(1), pages 242-258, February.
    10. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    11. Sam, Chung Yan & McNown, Robert & Goh, Soo Khoon, 2019. "An augmented autoregressive distributed lag bounds test for cointegration," Economic Modelling, Elsevier, vol. 80(C), pages 130-141.
    12. Nasim Shah Shirazi & Sajid Amin Javed & Dawood Ashraf, 2018. "Remittances, Economic Growth and Poverty: A Case of African OIC Member Countries," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 57(2), pages 121-143.
    13. Sibusiso Clement Makaringe & Hlalefang Khobai, 2018. "The effect of unemployment on economic growth in South Africa (1994-2016)," Working Papers 1815, Department of Economics, Nelson Mandela University, revised Mar 2018.
    14. Soma Rani Sutradhar, 2020. "The impact of remittances on economic growth in Bangladesh, India, Pakistan and Sri Lanka," International Journal of Economic Policy Studies, Springer, vol. 14(1), pages 275-295, February.
    15. 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.
    16. Mr. William Carrington & Ms. Enrica Detragiache, 1998. "How Big is the Brain Drain?," IMF Working Papers 1998/102, International Monetary Fund.
    17. Esmeralda Jushi & Eglantina Hysa & Arjona Cela & Mirela Panait & Marian Catalin Voica, 2021. "Financing Growth through Remittances and Foreign Direct Investment: Evidences from Balkan Countries," JRFM, MDPI, vol. 14(3), pages 1-17, March.
    18. Oteng-Abayie, Eric & Awuni, Prosper Ayinbilla & Adjei, Thomas Kwame, 2020. "The Impact of Inward Remittances on Economic Growth in Ghana," African Journal of Economic Review, African Journal of Economic Review, vol. 8(3), November.
    19. Joseph Dery Nyeadi & Nuhu Yidana & Mohammed Imoro, 2014. "Remittances and Economic Growth Nexus: Empirical Evidence from Nigeria, Senegal and Togo," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 4(10), pages 158-172, October.
    20. Angeliki N. Menegaki, 2019. "The ARDL Method in the Energy-Growth Nexus Field; Best Implementation Strategies," Economies, MDPI, vol. 7(4), pages 1-16, October.
    21. Cem Işık, 2013. "The Importance of Creating a Competitive Advantage and Investing in Information Technology for Modern Economies: an ARDL Test Approach from Turkey," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 4(4), pages 387-405, December.
    22. Arusha Cooray, 2012. "The Impact of Migrant Remittances on Economic Growth: Evidence from South Asia," Review of International Economics, Wiley Blackwell, vol. 20(5), pages 985-998, November.
    23. E. Wesley F. Peterson, 2017. "The Role of Population in Economic Growth," SAGE Open, , vol. 7(4), pages 21582440177, October.
    24. Craig A. Depken & Maja Nikšić Radić & Hana Paleka, 2021. "Causality between Foreign Remittance and Economic Growth: Empirical Evidence from Croatia," Sustainability, MDPI, vol. 13(21), pages 1-13, November.
    25. repec:wsr:wpaper:y:2015:i:158 is not listed on IDEAS
    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. 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. Md. Saiful Islam, 2022. "Do personal remittances influence economic growth in South Asia? A panel analysis," Review of Development Economics, Wiley Blackwell, vol. 26(1), pages 242-258, February.
    3. Mathew Ekundayo Rotimi & Mishelle Doorasamy & Udi Joshua & Grace Gift Rotimi & Confort Omolayo Rotimi & Gabriel Samuel & Gbenga Adeyemi & Ayodele Solomon Alemayo & Alfred Kimea, 2022. "ARDL Analysis of Remittance and Per Capita Growth Nexus in Oil Dependent Economy: The Nigeria’s Experience," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 15(3), pages 38-51, December.
    4. Sima Rani Dey & Faroque Ahmed & Mohammad Tareque & Md. Moniruzzaman, 2024. "Impact of Returnee Remittances on Migrant Households’ Well-Being in Bangladesh," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 36(6), pages 1545-1572, December.
    5. Francois, John Nana & Ahmad, Nazneen & Keinsley, Andrew & Nti-Addae, Akwasi, 2022. "Heterogeneity in the long-run remittance-output relationship: Theory and new evidence," Economic Modelling, Elsevier, vol. 110(C).
    6. Oluwasheyi S. Oladipo, 2020. "Migrant Workers' Remittances And Economic Growth: A Time Series Analysis," Journal of Developing Areas, Tennessee State University, College of Business, vol. 54(4), pages 75-88, October-D.
    7. Williams, Kevin, 2024. "Remittances and government expenditures on human capital in developing countries," International Economics, Elsevier, vol. 178(C).
    8. Eunice Adu-Darko & Emmanuel K Aidoo, 2022. "Government Stability in the Remittance-Economic Growth Link in Ghana," International Journal of Applied Economics, Finance and Accounting, Online Academic Press, vol. 14(1), pages 1-14.
    9. Abdilahi Ali & Baris Alpaslan, 2017. "Is There an Investment Motive Behind Remittances? Evidence From Panel Cointegration," Journal of Developing Areas, Tennessee State University, College of Business, vol. 51(1), pages 63-82, January-M.
    10. Cazachevici, Alina & Havranek, Tomas & Horvath, Roman, 2020. "Remittances and economic growth: A meta-analysis," World Development, Elsevier, vol. 134(C).
    11. Farroukh, Arafet & Mazioued, Manel & Pédussel Wu, Jennifer, 2024. "Revisiting the linkage between remittances inflow and economic growth: A semi-parametric estimation with panel data," IPE Working Papers 238/2024, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    12. Louis Bernard Tchekoumi & Patrick Danel Nya, 2023. "Remittances and economic growth: What lessons for the CEMAC zone?," Cogent Economics & Finance, Taylor & Francis Journals, vol. 11(1), pages 2191448-219, December.
    13. Destrée, Nicolas & Gente, Karine & Nourry, Carine, 2021. "Migration, remittances and accumulation of human capital with endogenous debt constraints," Mathematical Social Sciences, Elsevier, vol. 112(C), pages 38-60.
    14. Bucevska Vesna, 2022. "Impact of Remittances on Economic Growth: Empirical Evidence from South-East European Countries," South East European Journal of Economics and Business, Sciendo, vol. 17(1), pages 79-94, June.
    15. Boris Fisera & Menbere Workie Tiruneh, 2023. "Beyond the Balassa-Samuelson Effect: Do Remittances Trigger the Dutch Disease?," Eastern European Economics, Taylor & Francis Journals, vol. 61(1), pages 23-65, January.
    16. Cazachevici, Alina & Havranek, Tomas & Horvath, Roman, 2019. "Remittances and Economic Growth: A Quantitative Survey," MPRA Paper 96823, University Library of Munich, Germany.
    17. Helal Uddin & Md. Hasanur Rahman & Shapan Chandra Majumder, 2022. "The impact of agricultural production and remittance inflows on economic growth in Bangladesh using ARDL technique," SN Business & Economics, Springer, vol. 2(4), pages 1-25, April.
    18. James Temitope Dada & Taiwo Akinlo, 2023. "Remittances-Finance-Growth Trilogy: Do Remittance And Financial Development Complement Or Substitute Each Other To Affect Growth In Nigeria?," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 68(236), pages 105-138, January –.
    19. 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).
    20. Mohammad Salahuddin & Jeff Gow, 2015. "The relationship between economic growth and remittances in the presence of cross-sectional dependence," Journal of Developing Areas, Tennessee State University, College of Business, vol. 49(1), pages 207-221, January-M.

    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:taf:oaefxx:v:11:y:2023:i:2:p:2243189. 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/OAEF20 .

    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.