Impact of Remittances on Domestic Investment: A Panel Study of Six South Asian Countries

South Asia Economic Journal Pub Date : 2020-02-23 DOI:10.1177/1391561420903199

R. Dash

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引用次数: 22

Abstract

Remittances inflow to South Asian countries increased significantly and is now one of the major sources of external finance overtaking traditional capital inflows such as foreign direct investment (FDI), foreign portfolio investment (FPI) and aid. However, the role of remittances in economic development has not been examined extensively, particularly for South Asian countries. This article examines the impact of remittances on domestic investment for South Asia over 1991–2017. Advanced panel estimation methods (unit root, cointegration and causality) are employed to account for potential country-specific heterogeneity and the endogeneity problem. Results of this study suggest that remittances increase domestic investment in the short term as well as in the long run for South Asia. This indicates that remittances are used not only for consumption purposes but also for investment activities such as human and physical capital development. The panel causality results suggest the presence of uni-directional causality running from remittances to domestic investment. Therefore, the result of this study supports the theoretical argument and previous empirical studies for other developing countries JEL: C3, 01, F3, F22

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汇款对国内投资的影响:南亚六国的面板研究

流入南亚国家的汇款大幅增加，现在已成为超过外国直接投资、外国证券投资和援助等传统资本流入的主要外部资金来源之一。然而，汇款在经济发展中的作用尚未得到广泛审查，特别是对南亚国家而言。本文考察了1991-2017年汇款对南亚国内投资的影响。采用先进的面板估计方法(单位根、协整和因果关系)来解释潜在的国家特定异质性和内生性问题。本研究的结果表明，汇款在短期和长期都增加了南亚的国内投资。这表明汇款不仅用于消费目的，而且还用于人力和物质资本开发等投资活动。面板因果关系结果表明，存在从汇款到国内投资的单向因果关系。因此，本研究的结果支持了其他发展中国家的理论观点和以往的实证研究JEL: C3, 01, F3, F22

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来源期刊

South Asia Economic Journal Economics, Econometrics and Finance-Economics, Econometrics and Finance (all)

CiteScore

1.10

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0.00%

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期刊介绍： The South Asian nations have progressively liberalized their economies in recent years in an effort to integrate with the world economy. They have also taken steps to enhance multilateral and regional economic integration. Even though the South Asian economies have grown at an average rate of more than 5 per cent over the last few years, roughly 40 per cent of their people still live below the poverty line. Hence, the South Asian region continues to face many challenges of economic and social development. The South Asia Economic Journal (SAEJ) is designed as a forum for informed debate on these issues, which are of vital importance to the people of the region who comprise one-sixth of the world’s population. The peer-reviewed journal is devoted to economic analysis and policy options aimed at promoting cooperation among the countries comprising South Asia. It also discusses South Asia’s position on global economic issues, its relations with other regional groupings and its response to global developments. We also welcome contributions to inter-disciplinary analysis on South Asia. As a refereed journal, SAEJ carries articles by scholars, economic commentators,policy-makers and officials, from both the private and public sectors. Our aim is to create a vibrant research space to explore the multidimensional economic issues of concern to scholars working on South Asia. Among the issues debated in relation to South Asia are: - the implications of global economic trends; - the issues and challenges by WTO; - approaches to industrialization and development; - the role of regional institutions such as the SAARC; - the relationship between SAARC and other regional economic groupings such as ASEAN; - the implications of economic liberalization for trade and investment in the region; - new initiatives that can be launched to enhance economic cooperation among the South Asian countries both on a bilateral and a regional basis.