The Impact of Workers’ Remittances on Economic Growth: Panel Data Approach for Selected Country Group

Abstract

Recent decade has witnessed the growing importance of remittances as a source of foreign income for many developing countries. Thus, as the value of remittances around the world increases, many researchers attempt to analyze the remittances’ effects on economic performance. Yet, real effect of remittances on economic growth rate is still controversial issue in the literature. Therefore, main objective of this study is to analyze the linkage between economic growth rates and remittance inflows into eight largest recipient countries of the global remittances by employing panel data analysis for the period 1990-2015. Our findings reveal that there is no significant relationship between remittances and growth. Yet, the study has empirically proved that growth is positively associated with gross capital formations and GDP per capita while it is negatively related with inflation and openness index.