Remittances and Economic Growth: Empirical Analysis from a Panel of Selected Asian Nations

This article's endeavour is to explore the consequences of remittances on the growth of an economy by employing a panel of 17 selected remittance-receiving Asian nations over the years, stretching from 1993 to 2017. Initially, the study used the panel unit root test to identify whether the variables are stationary or not. Subsequently, by using cointegration test, a long-run association among the variables was seen. Finding a long-run relationship, 'fully modified ordinary least square' method has been applied to examine the impact of remittances and other explanatory variables on the output per capita of Asian nations. The coefficient of remittances being positive and statistically significant implies that remittances enhance growth in these countries. Inflows of remittances to the Asian region are abundant and, considering the present trend of migration, it is likely to grow. To maximize the developmental effects of these inflows, developing pro-remittances in formal public and private infrastructure are a crucial policy target for governments in the region. Moreover, in addition to conventional determinants of growth like investment in human and physical capital, trade and foreign direct investment (FDI), Asian countries can increase their growth by mobilizing the remittances.