Do Remittances Have a Real Impact on Economic Performance: Evidence from Côte d’Ivoire
top of page
Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute
Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute

Economics and Business

Quarterly Reviews

ISSN 2775-9237 (Online)

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
crossref
doi
open access

Published: 23 May 2019

Do Remittances Have a Real Impact on Economic Performance: Evidence from Côte d’Ivoire

Silvère Yao Konan, Felix Fofana N’Zué

Université Félix Houphouet Boigny Abidjan, Côte d’Ivoire

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, management journal

Download Full-Text Pdf

doi

10.31014/aior.1992.02.02.88

Pages: 290-305

Keywords: Remittances, Economic Growth, ARDL Approach, Côte d’Ivoire

Abstract

The paper investigated the impact of international remittances inflow on Côte d’Ivoire’s economic performance using per capita gross domestic product (GDP) growth. Data ranging from 1975 to 2016 was used within an autoregressive distributed lag (ARDL) model framework. The aim is to establish whether there exist long-run dynamics between remittances, the country’s per capita GDP and selected control variables. The empirical findings suggest a long-run relationship between remittances, remittances square, per capita GDP, investment, openness, education, and population size. Interestingly, the paper found that remittances do not significantly impact economic performance however, there exists a nonlinear relationship between remittances and growth. This invariably implies that there is a threshold beyond which, remittances will positively affect per capita growth. This tipping point stands at 1.068% of GDP. The overall implications of the findings are discussed.

References

  1. Abdelhadi S. and Bashayreh A. (2017), Remittances and Economic Growth Nexus: Evidence from Jordan, International Journal of Business and Social Science, Vol. 8 (12): 98-102

  2. Alkhathlan, A.K., 2013. The nexus between remittance outflows and growth: the case of Saudi Arabia. Econ. Model. Vol. 33, pp. 695–700.

  3. Andersson, F.N.G., Karpestam, P., 2013. International remittances. A proposal how to test hypotheses about determinants of remittances with macroeconomic time series. Working Papers 2011:1. Lund University, Department of Economics.

  4. Barajas A., Chami R., Fullenkamp C., Gapen M. and Montiel P. (2009), Do Workers’ Remittances Promote Economic Growth? IMF Working Paper WP/09/153.

  5. Chami, R., Fullenkamp, C., Jahjah, S., 2005. Are Immigrant Remittance Flows a Source of Capital for Development?, IMF Staff Papers 52,1,55-81, http://www.highbeam.com/doc/1G1-133132978.html.

  6. Chami, R., Fullenkamp, C., Jahjah, S., 2003. Are Immigrant Remittances Flows a Source of Capital for Development, IMF Working Paper (WP/03/189).

  7. Ghosh Dastidar, S.  (2017), Impact of Remittances on Economic Growth in Developing Countries: The Role of Openness. Global Economy Journal, 13(1), pp. -.      Retrieved 30 Apr. 2019, from doi:10.1515/gej-2016-0066

  8. Dramani, L., & Oga, I. J.-B. (2017). Understanding Demographic Dividends In Africa: The NTA Approach. Journal of Demographic Economics, 83(01), 85–101. doi:10.1017/dem.2016.30 Edelbloude, J., Fontansers, C., Makhlouf, F., (2017), Do Remittances respond to Revolutions? The Evidence from Tunisia, Research in International Business and Finance, http://dx.doi.org/10.1016/j.ribaf.2017.04.044

  9. El-Sakka, M. I. T. & McNabb, Robert, (1999), The Macroeconomic Determinants of Emigrant Remittances, World Development, Elsevier, vol. 27(8), pages 1493-1502, August.

  10. Fayissa, Bichaka & Nsiah, Christian. (2008), The Impact of Remittances on Economic Growth and Development in Africa, The American Economist, 55 (2), doi: 10.1177/056943451005500210

  11. Gapen, M.T., Chami, M.R., Montiel, M.P., Barajas, M.A., Fullenkamp, C., (2009), Do Workers’ Remittances Promote Economic Growth?. (No. 9-153),  International Monetary Fund.

  12. Giuliano, Paola and Ruiz-Arranz, Marta, (2006), Remittances, Financial Development, and Growth, IMF Working Paper No. 05/234; IZA Discussion Paper No. 2160. Available at SSRN: https://ssrn.com/abstract=888103

  13. Giuliano, P., & Ruiz-Arranz, M. (2009), Remittances, financial development, and growth. Journal of Development Economics, 90(1), 144–152. doi:10.1016/j.jdeveco.2008.10.005 

  14. Goschin Z. (2013), The Remittances as a Potential Economic Growth Resource for Romania Annales Universitatis Apulensis Series Oeconomica, Vol. 15(2): 655-661.

  15. Goschin, Z., (2014), Remittances as an economic development factor. Empirical evidence from the CEE countries, Procedia Economics and Finance. Vol. 10, pp.54 – 60

  16. Hassan G. M. and Shakur S. (2017), Nonlinear effect of remittances on per capita GDP growth in Bangladesh, Economies, 5,25; doi:10.3390/economies5030025.

  17. INS, (2008), Enquête sur le niveau et les conditions de vie des ménages, Rapport descriptif, http://www.ins.ci/ENV/ENV2008.pdf

  18. INS (2015), Enquête sur le niveau et les conditions de vie des ménages, Rapport descriptif, http://www.ins.ci/n/templates/docss/env2015.pdf

  19. Jayaraman T.K., Choong C.K. and Kumar R. R. (2012). Role of remittances in India's economic growth Global Business and Economics Review, http://www.inderscience.com/info/inarticletoc.php?jcode=gber&year=2012&vol=14&issue=3Vol. 14(3):159-177

  20. Jebran K., Abdullah, Iqbal A. and Ullah I. (2016), Effects of Remittances on Per Capita Economic Growth of Pakistan, Pakistan Business Review pp. 1-18

  21. Jouini, J., 2015. Economic growth and remittances in Tunisia: bi-directional causal links. J. Policy Model. Vol. 37, pp. 355–373.

  22. Karamelikli H. and Bayar Y. (2015), Remittances and Economic Growth in Turkey, Ecoforum, Vol. 4 Issue 2(7):33-40

  23. Koczan, Z., (2016), Remittances during crises: Evidence from ex-Yugoslavia, Economics of Transition, Vol. 24 (3):507–533, DOI: 10.1111/ecot.12099

  24. Konan, Y.S., (2017), "Post electoral crisis and international remittances: evidence from Côte d’Ivoire"?,  Post electoral crisis and international remittances: evidence from Côte d’Ivoire — Economics E-Journal

  25. Konte Maty (2014), Do Remittances Not Promote Growth? A bias-adjusted three-step mixture-of-regressions, United-Nations (UNU-MERIT) working paper

  26. Kumar R. R. (2013) Remittances and economic growth: A study of Guyana, Economic Systems Vol. 37(3): 462-472

  27. Kumar, R. R., & Stauvermann, P. J. (2014). Exploring the nexus between remittances and economic growth: a study of Bangladesh. International Review of Economics, Vol. 61(4), 399–415. doi:10.1007/s12232-014-0199-3 

  28. Kripfganz, S. and D. C. Schneider (2018), Response surface regressions for critical value bounds and approximate p-values in equilibrium correction models. Manuscript, University of Exeter and Max Planck Institute for Demographic Research,  www.kripfganz.de/research/Kripfganz_Schneider_ec.html.

  29. Lim, S., & Simmons, W. O. (2015). Do remittances promote economic growth in the Caribbean Community and Common Market? Journal of Economics and Business, Vol. 77, 42–59. doi:10.1016/j.jeconbus.2014.09.001 

  30. Matuzeviciute K. and Butkus M. (2016), Remittances, Development Level, and Long-Run Economic Growth, Economies, vol. 4, 28; doi: 10.3390/economies4040028

  31. Meyer, D., A. Shera, (2017), The Impact of Remittances on Economic Growth: An Econometric Model, Economia, vol. 18, p. 147–155

  32. Ncube, M., Brixiova, Z., 2013. Remittances and their macroeconomic impacts: evidence from Africa. Working Paper N.188. African Development Bank Group.

  33. Nwaogu, U. G., and M. J. Ryan, (2015), FDI, Foreign Aid, Remittance and Economic Growth in Developing Countries,  Review of Development Economics 19 (1): 100–115.

  34. Nyamongo, E., M., R., N. Misati, L., Kipyegon, L., Ndirangu, (2012), Remittances, financial development and economic growth in Africa, Journal of Economics and Business, vol. 64, p.240– 260

  35. Ofeh M. A. and Muandzevara A. T. (2017), Investigating the Effects of Migrant Remittances on the Economic Growth of Cameroon, International Journal of Economics and Finance. Vol. 9(2):58-69

  36. Pesaran, M. H., Shin, Y., and Smith, R. J. (1999), Bounds Testing Approaches to the Analysis of Long-run Relationships. Edinburgh School of Economics Discussion Paper Series No. 46.

  37. Pesaran, M.H., Shin, Y., and Smith, R.J., (2001). Bounds Testing Approaches to the Analysis of Level Relationships. Journal of Applied Econometrics, Vol.16 pp. 289-326.

  38. Pesaran, M. H., Shin, Y., & Smith, R. J. (2004), Bounds Testing Approaches to the Analysis of Long-run Relationships. https://doi.org/10.17863/CAM.5093

  39. Rao, B. B., & Hassan, G. M. (2011). A panel data analysis of the growth effects of remittances. Economic Modelling, 28(1-2), 701–709. doi:10.1016/j.econmod.2010.05.011 

  40. Ratha, D., (2007),  Leveraging remittances for development, Migration Policy Institute, Washington D.C., World Bank.

  41. Ratha, D., (2013), The Impact of Remittances on Economic Growth and Poverty Reduction, Migration Policy Institute, Washington, D.C

  42. Sebil O Oshota and Abdulazeez A Badejo, (2015) ''Impact of Remittances on Economic Growth in Nigeria: Further Evidence'', Economics Bulletin, Volume 35, Issue 1, pages 247-258

  43. Shera, A. and Meyer, D. (2013), Remittances and their impact on Economic Growth, Periodica Polytechnica Social and Management Sciences, 21(1), pp. 3-19. doi: https://doi.org/10.3311/PPso.2152.

  44. Stojanov, R.; Němec, D.; Žídek, L. (2019), Evaluation of the Long-Term Stability and Impact of Remittances and Development Aid on Sustainable Economic Growth in Developing Countries, Sustainability, 11(6), 1538.

  45. United Nations, (2017), Trends in International Migrant Stock: The 2017 Revision; United Nations Database, POP/DB/MIG/Stock/Rev.2017; Department of Economic and Social Affairs, Population Division: New York, NY, USA, 2017.

  46. Vukenkeng A. W. and Ongo N. B. E. (2013). Do Remittances Improve the Economic Growth of Africa?, International Journal of Financial Economics, vol. 1(4): 119-132.

  47. World Bank (2018), World Development indicators 2018, available at http://databank.worldbank.org/data/views/variableselection/selectvariables.aspx?source=world-development-indicators , http://databank.worldbank.org/data/download/WDI_excel.zip

  48. World Bank, (2016), Migration and Remittances Factbook 2016, Third Edition. Washington, DC, https://openknowledge.worldbank.org/handle/10986/23743

  49. Ziesemer, T.H., (2012), Worker remittances, migration, accumulation and growth in poor developing countries: survey and analysis of direct and indirect effects, Economic Modelling,  29 (2), 103–118.

bottom of page