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Workers' remittances and economic growth in China and Korea : An empirical analysis

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Frame of Image stan Email: stjawaid@hotmail.com Tel: +92-345-309-4838 Second Author Syed Ali Raza Lecturer, IQRA University, Karachi-75300, Pakistan Email: syed_aliraza@hotmail.com Tel: +92-333-344-8467 (Corresponding Author)
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Abstract This study investigates the relationship between workers’ remittances and economic growth in China and Korea by employing time series data from period of 1980 to 2009. Cointegration results confirm that there exist significant positive long run relationship between remittances and economic growth in Korea, while, significant negative relationship exist between remittances and economic growth in China. Error correction model confirms the significant positive short run relationship of workers’ remittances with economic growth in Korea while, the results of China were insignificant in short run. Causality analysis confirms unidirectional causality runs from workers’ remittances to economic growth in both China and Korea. Sensitivity analysis confirms that the results are robust. It is suggested that Korea should form friendly policy to ensure the continuous inflows of workers’ remittances and their efficient utilization to ensure economic growth. On the other hand, China should keep an eye to reduce voluntary unemployment leads to decrease in productivity and growth in the country. Key words: Remittances, Open Economy, Economic Growth JEL Classification: F24, F41, F43
1. Introduction Workers’ remittances played an important role to promote e


Full Text
Title Workers' remittances and economic growth in China and Korea
Similar Titles
Sub Title

An empirical analysis

Material Type Reports
Author(English)

Jawaid, Syed Tehseen; Raza,Syed Ali

Publisher

Iqra University Abid Town

Date 2012
Pages 19
Subject Country China(Asia and Pacific)
South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Economy < General
Economy < Economic Conditions

Abstract

This study investigates the relationship between workers’ remittances and economic growth in China and Korea by employing time series data from period of 1980 to 2009. Cointegration results confirm that there exist significant positive long run relationship between remittances and economic growth in Korea, while, significant negative relationship exist between remittances and economic growth in China. Error correction model confirms the significant positive short run relationship of workers’ remittances with economic growth in Korea while, the results of China were insignificant in short run. Causality analysis confirms unidirectional causality runs from workers’ remittances to economic growth in both China and Korea. Sensitivity analysis confirms that the results are robust. It is suggested that Korea should form friendly policy to ensure the continuous inflows of workers’ remittances and their efficient utilization to ensure economic growth. (The rest omitted)