The role of migrant workers remittances in fostering economic growth

2015 ◽  
Vol 42 (8) ◽  
pp. 690-705 ◽  
Author(s):  
Muhammad Azam
Keyword(s):  
Economic Growth ◽  
Migrant Workers ◽  
Time Series Data ◽  
Ordinary Least Squares ◽  
Parameters Estimation ◽  
Series Data ◽  
Control Variables ◽  
Content Type ◽  
Analytical Technique ◽  
Empirical Results

Purpose – The purpose of this paper is to examine the macroeconomic impact of migrant workers’ remittances on economic growth in four developing Asian countries namely: Bangladesh, India, Pakistan and Sri Lanka. Design/methodology/approach – This study utilizes annual time series data over the period 1976-2012 and the ordinary least squares as an analytical technique for parameters estimation. Findings – Empirical results support the existence of a significant positive relationship between migrant workers remittances and economic growth. The other control variables such as foreign direct investment, openness to trade and infrastructure are also found to be statistically significant with expected signs. Practical implications – The findings of this study are expected to guide policy makers in formulating the right and relevant policies through which migrant workers’ remittances can be made more productive and its benefits for both migrants and the country of origin are maximized. Consequently, it will foster economic growth and development. Originality/value – This paper provides some valuable evidences on the significance of migrant workers remittances as a source of economic growth. Moreover, the study differs from the erstwhile studies in terms of control variables, time period and method of estimation. Finally, the empirical results established are relatively robust.

Has the low level of economic growth spurred informal sector activities in Uganda? An empirical analysis

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Stephen Esaku
Keyword(s):  
Economic Growth ◽  
Informal Sector ◽  
Shadow Economy ◽  
Time Series Data ◽  
Series Data ◽  
Content Type ◽  
Low Level ◽  
Revenue Collection ◽  
Long Run ◽  
Short Run

PurposeIn this paper, the authors examine how economic growth shapes the shadow economy in the long and short run.Design/methodology/approachUsing annual time series data from Uganda, drawn from various data sources, covering the period from 1991 to 2017, the authors apply the ARDL modeling approach to cointegration.FindingsThis paper finds that an increase in economic growth significantly reduces the size of the shadow economy, in both the long and short run, all else equal. However, the long-run relationship between the shadow economy and growth is non-linear. The results suggest that the rise of the shadow economy could partially be attributed to the slow and sluggish rate of economic growth.Practical implicationsThese findings imply that addressing informality requires addressing underlying factors of underdevelopment since improvements in economic growth also translate into a reduction in the size of the shadow economy in the short and long run.Originality/valueThese findings reveal that the low level of economic growth is an issue because it spurs informal sector activities in the short run. However, as the economy improves, it becomes an incentive for individuals to operate in the informal sector. Additionally, tackling shadow activities in the short run could help improve tax revenue collection.

Influence of systemic banking crisis and currency crisis on the relationship of export and economic growth

2017 ◽  
Vol 10 (1) ◽  
pp. 82-110
Author(s):  
Syed Ali Raza ◽  
Mohd Zaini Abd Karim
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Financial Crises ◽  
Currency Crises ◽  
Time Series Data ◽  
Banking Crises ◽  
Series Data ◽  
Content Type ◽  
Relationship Of ◽  
The Relationship

Purpose This study aims to investigate the influence of systemic banking crises, currency crises and global financial crisis on the relationship between export and economic growth in China by using the annual time series data from the period of 1972 to 2014. Design/methodology/approach The Johansen and Jeuuselius’ cointegration, auto regressive distributed lag bound testing cointegration, Gregory and Hansen’s cointegration and pooled ordinary least square techniques with error correction model have been used. Findings Results indicate the positive and significant effect of export of goods and services on economic growth in both long and short run, whereas the negative influence of systemic banking crises and currency crises over economic growth is observed. It is also concluded that the impact of export of goods and service on economic growth becomes insignificant in the presence of systemic banking crises and currency crises. The currency crises effect the influence of export on economic growth to a higher extent compared to systemic banking crises. Surprisingly, the export in the period of global financial crises has a positive and significant influence over economic growth in China, which conclude that the global financial crises did not drastically affect the export-growth nexus. Originality/value This paper makes a unique contribution to the literature with reference to China, being a pioneering attempt to investigate the effects of systemic banking crises and currency crises on the relationship of export and economic growth by using long-time series data and applying more rigorous econometric techniques.

FDI and economic growth: empirical evidence from Pakistan

2016 ◽  
Vol 32 (1) ◽  
pp. 63-76 ◽  
Author(s):  
Naqeeb Ur Rehman
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Human Capital ◽  
Time Series Data ◽  
Negative Relationship ◽  
Series Data ◽  
Literacy Rate ◽  
Content Type ◽  
Low Level ◽  
The Relationship

Purpose – The purpose of this paper is to investigate the relationship between FDI and economic growth. Two models have been used to analyse the time series data on Pakistan from 1970 to 2012. This paper contributes to the existing literature by examining the different empirical methods to estimate the relationship between FDI and economic growth. The vector error correction model (VECM) results suggest that FDI depends on the economic growth but this relationship is not true vice versa. The second model showed that FDI, human capital and exports are important factors of economic growth. However, the negative relationship between interactive variables (FDI and human capital) and economic growth indicates that low level of human capital affect the economic growth of Pakistan. Design/methodology/approach – Used time series data (1970-2012) for empirical analysis. Findings – The VECM results suggest that FDI depends on the economic growth but this relationship is not true vice versa. The second model showed that FDI, human capital and exports are important factors of economic growth. However, the negative relationship between interactive variables (FDI and human capital) and economic growth indicates that low level of human capital affect the economic growth of Pakistan. Research limitations/implications – The limitations of this empirical paper are as follows: it would be better to use secondary school enrolment (per cent) to measure human capital instead adult literacy rate. Similarly, the non-availability of R & D data on Pakistan limited the scope of the paper to measure the role of absorptive capacity of domestic and its relationship with FDI. The results of this paper are specifically related to Pakistan and cannot be generalized to other countries. Practical implications – This empirical study implies that Pakistan should improve its economic growth. The robust policies are required to increase the literacy rate of the country. Higher human capital will attract more FDI into the economy and may reduce the unemployment. This would increase the national output of the country and their national income level. Presently, Pakistan is going through war on terror and foreign firms are reluctant to invest. A stable and secure business environment will ultimately inject foreign direct investment into Pakistan. Originality/value – This paper is first time analyse the time series data to explore the relationship between FDI and economic growth. A new approach has been used called VECM.

Investigating the non-linear Wagner’s hypothesis in South Africa

2017 ◽  
Vol 8 (4) ◽  
pp. 462-473 ◽  
Author(s):  
Temitope Lydia A. Leshoro
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Government Spending ◽  
Time Series Data ◽  
Series Data ◽  
Unique Contribution ◽  
Content Type ◽  
Non Linear ◽  
Regression Error ◽  
The Government

Purpose The commonly adopted view of the relationship between government spending and economic growth follows the Keynesian approach, in which government spending is considered to determine economic growth. However, there is another theory, which suggests that economic growth in fact determines government spending. This is Wagner’s hypothesis. The purpose of this paper is to investigate which of the two approaches applies to South Africa, and further observes the level of non-linearity between the two variables. Design/methodology/approach This study was carried out using quarterly time series data from 1980Q1 to 2015Q1. Granger causality technique was used to observe the direction of causality between the two variables, while regression error specification test (RESET) was employed to determine whether the variables exhibit linear or non-linear behaviour. This was followed by observing the threshold band, using two techniques, namely, sample splitting threshold regression and quadratic generalised method of moments. Findings The causality result shows that South Africa follows Wagner’s law, whereby government spending is determined by economic growth, supporting Odhiambo (2015). The RESET result shows that the variables depict a non-linear relationship, thus the government spending economic growth model is non-linear. It was found that if positive economic development is to be achieved, economic growth should preferably be kept within the −1.69 and 3.0 per cent band, and specifically above 1 per cent band. Originality/value The unique contribution of this study is that no previous study has attempted the non-linear government spending-economic growth nexus whether within the Keynesian or Wagner law for South Africa.

scholarly journals DOES STOCK MARKET DEVELOPMENT PLAY ANY ROLE IN THE EFFECT OF FDI ON ECONOMIC GROWTH IN NIGERIA? AN EMPIRICAL INVESTIGATION

2016 ◽  
pp. 51-61
Author(s):  
Oziengbe Scott Aigheyisi
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Time Series Data ◽  
Ordinary Least Squares ◽  
Growth Effect ◽  
Market Development ◽  
Series Data ◽  
Domestic Investment ◽  
Government Consumption ◽  
Stock Market Development

The objective of the paper is to investigate whether stock market development plays any role in the effect of foreign direct investment (FDI) on economic growth in Nigeria. Using annual time series data that span the period from 1981 to 2014, and employing the fully modified ordinary least squares (FMOLS) estimation technique, the empirical evidence indicates that FDI, domestic investment and stock market development positively and significantly affect economic growth, but the effect of the interaction between stock market development and FDI on economic growth is negative and significant, indicating that the Nigerian bourse is not yet fully developed to engender positive growth effect of FDI. The study further finds that government consumption expenditure and trade openness adversely affect the growth of the country’s real GDP per capita. Recommendations of the paper include efforts by the government to design and implement programmes and policies aimed at enhancing the attractiveness of the country to foreign and local investors, efforts by capital market regulators to enhance stock market efficiency, reduction of government consumption expenditures and import control.

scholarly journals Impact of Industrial Hollowing on Regional Economic Growth Rate: An Empirical Analysis based on Shanghai’s Data

2018 ◽  
Vol 14 (22) ◽  
pp. 223
Author(s):  
Yajie Bai ◽  
Maoguo Wu
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Time Series Data ◽  
Negative Impact ◽  
Empirical Test ◽  
Ordinary Least Squares ◽  
Series Data ◽  
Producer Price ◽  
Economic Growth Rate ◽  
Labor Resources

The relation between industrial hollowing-out and Shanghai’s economic growth rate was analyzed by using ordinary least squares and ECM regression model. Data used in the empirical test was a monthly time series data from January 2003 to February 2017. Empirical results show Industrial producer price index, and the total amount of imports has a positive relationship with economic growth rate. However, fixed asset investment, land use cost, and labor resources cost have a negative impact on economic growth rate.

scholarly journals How the GCC Economic Crises Effect Labor Migration: Evidence from Pakistan

2018 ◽  
Vol 5 (2) ◽  
pp. 139-146 ◽  
Author(s):  
Yasir Khan ◽  
Wang Mingyi
Keyword(s):  
Economic Growth ◽  
Migrant Workers ◽  
Significant Relationship ◽  
Labor Migration ◽  
Inflation Rate ◽  
Time Series Data ◽  
Political Stability ◽  
Series Data ◽  
Economic Crises ◽  
The Impact

Migrant workers have participated in promoting economic growth and prosperity and the generation of wealth in countries of destination. The Gulf Cooperation Council (GCC) which is comprised of six countries such as Saudi Arabia, UAE, Qatar, Kuwait, Bahrain, and Oman have been historically and traditionally job market for Pakistani workers. Labor migration and its relationship to economic growth and employment have received increasing attention because of increasing demand for labor, higher salaries, economic and political stability. Using a case study, we focus on the impact and relationship of labor migration with macroeconomic indicators such as Gross Domestic Product (GDP), unemployment, and inflation rate. Limited employment opportunities, the weak economy, and political instability are the factors leading labor migration from Pakistan. Consequently, the government of Pakistan considered labor migration primarily as an employment sector and encourage labor migration to solve economic problems in the country. We analyze the impact of labor migration on (GDP), Inflation rate and unemployment in Pakistan with the help of time series data from 1971-2016. The result to have showed a positive and significant relationship between labor migration and GDP, while a negative but significant relationship with unemployment. On the other hand, there is no relationship between labor migration and inflation rate. we found that the GCC economic crises actually caused significant influence on labor migration in the case of Pakistan.

Financial development, FDI and economic growth: evidence from Sudan

2018 ◽  
Vol 45 (8) ◽  
pp. 1236-1249 ◽  
Author(s):  
Abdalla Sirag ◽  
Samira SidAhmed ◽  
Hamisu Sadi Ali
Keyword(s):  
Economic Growth ◽  
Least Squares ◽  
Financial Development ◽  
Unit Root ◽  
Structural Break ◽  
Ordinary Least Squares ◽  
Series Data ◽  
Content Type ◽  
Long Run ◽  
Cointegration Tests

Purpose The effect of foreign direct investment (FDI) on economic growth is widely believed to be contingent on the development of the financial sector. Nevertheless, as the possibility that the effect of financial development on growth being contingent on FDI has been neglected in existing literature, the authors have investigated it in this paper. In general, the purpose of this paper is to examine the effect of financial development and FDI on economic growth in Sudan using annual data from 1970 to 2014. Design/methodology/approach Since most of the macroeconomic variables are subject to unit root problem, the time series data are assessed using unit root and cointegration tests with/without structural break. Moreover, the study uses the fully modified ordinary least squares and the dynamic ordinary least squares techniques to estimate the long-run model. Findings The results of the cointegration tests provide evidence that a long-run relationship exists among variables even after accounting for the structural break. The results show that financial development and FDI are positive and significant in explaining economic growth in Sudan. Financial development is found to be more beneficial to economic growth than FDI. Moreover, the findings reveal that FDI leads to better economic performance through financial development. Interestingly, the findings of the study show that the effect of financial development on economic growth is further enhanced by the inflows of FDI. Research limitations/implications The government should focus on promoting FDI in more productive sectors. In addition, further cooperation with multinational enterprises is needed to increase FDI in the country. Originality/value This is the first paper that empirically examines both the interlinked impact of FDI on growth through financial development and the impact of financial development on economic growth through FDI in Sudan using appropriate econometric methods.

Financial development and economic growth in Tanzania: an ARDL and bound testing approach

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Saganga Mussa Kapaya
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Time Series Data ◽  
Developing Economies ◽  
Financial System ◽  
Principal Component ◽  
Series Data ◽  
Content Type ◽  
Testing Procedures ◽  
Positive Effects

Purpose The purpose of this study is to empirically weigh the evidence for financial depth, liquidity and efficiency role to economic growth, and test for the existence of cointegration between financial development variables and economic growth in Tanzania. Design/methodology/approach The study used the autoregressive distributed lag model with bound testing procedures. The sample covered yearly time-series data from 1980 to 2017, i.e. 38 years. Findings The results suggest that financial system depth is positively related to economic growth in the short run and that financial system liquidity and efficiency is strongly negatively associated with economic growth both in the short and long run. Further, it is found that financial development is cointegrated with economic growth. Thus, financial reforms and liberalisation have not fully brought the desired positive effects on economic growth yet. Originality/value The study uses principal component analysis to capture specific dimensions within the financial system as an intuitive way to aggregate financial development effects. Unlike studies that included several countries with heterogeneous characteristics, which are sometimes difficulty to homogenise, in recognition of countries’ unique experiences, this study uses data from Tanzania as a specific case. It documents pertinent pieces of evidence for a developing economy necessary for financial policy adjustments post the financial and economic liberalisation and reforms period. It nevertheless sheds light on financial policies for other comparable developing economies during and after both financial and economic liberalisation settings.

Do fisheries and aquaculture production have dominant roles within the economic growth of Pakistan? A long-run and short-run investigation

2019 ◽  
Vol 121 (8) ◽  
pp. 1926-1935
Author(s):  
Abdul Rehman ◽  
Zhang Deyuan ◽  
Sehresh Hena ◽  
Abbas Ali Chandio
Keyword(s):  
Economic Growth ◽  
Time Series Data ◽  
Government Expenditure ◽  
Series Data ◽  
Bounds Testing ◽  
Content Type ◽  
Ardl Bounds Testing ◽  
Bounds Testing Approach ◽  
Testing Approach ◽  
Ardl Bounds Testing Approach

Purpose The purpose of this paper is to investigate and explore the connection between aquaculture and capture fisheries production and economic growth in Pakistan. Fisheries play an important role in Pakistan’s national economy, and Pakistan has sufficient fishery resources to be developed. Most of the population in the coastal areas depends on fisheries for their livelihood. Design/methodology/approach This research was based on time series data of aquaculture and capture fisheries production and the analysis of their relationship with economic growth in Pakistan. The study used an autoregressive distributed lag (ARDL) bounds testing approach to check the dynamic causality between the study variables. Findings The results showed that aquaculture and capture fisheries production have had a positive effect on the economic growth in Pakistan. Practical implications Better infrastructure for the fishing industry, increased government expenditure on facilities and financial support for the fish farmers could contribute to economic growth in the future. Recommendations for improvements in these areas have been made. Originality/value By using an ARDL bounds testing approach, this study contributes to the literature regarding fisheries production and economic growth in Pakistan.

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