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Are there Significant Externality Effects of Remittances in Asian Economic Growth?

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Abstract

This paper estimates the externality effects of remittances for selected Asian countries. According to Romer (1986), externality generated by the education sector can raise nationwide productivity. Because a portion of remittances income is invested on education, remittances stock can also generate such externalities. Using a Romer-type production function and panel cointegration, we find that the externality effects of remittances are small but highly significant.

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  • Gazi M. Hassan & Shamim Shakur, 2015. "Are there Significant Externality Effects of Remittances in Asian Economic Growth?," Working Papers in Economics 15/04, University of Waikato.
    • Handle: RePEc:wai:econwp:15/04
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    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.
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    6. Pesaran, M. Hashem & Vanessa Smith, L. & Yamagata, Takashi, 2013. "Panel unit root tests in the presence of a multifactor error structure," Journal of Econometrics, Elsevier, vol. 175(2), pages 94-115.
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    More about this item

    Keywords

    remittances; externality effects; endogenous growth; panel cointegration; group-mean panel dynamic OLS;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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