The Impact of Remittance on Economic Growth in Low and Middle Income Countries

Abstract

This study investigates the relationship between remittance and economic growth in a panel of 93 low and middle-income countries using annual data from 2009 to 2017. The estimated model using system GMM (SYS-GMM) revealed that remittance has a significant negative impact on growth after removing outliers. However, the result before outliers was indicating a negative but nonsignificant relationship between remittance and growth. The results confirm that remittance flow leads to deteriorating economic growth in the receiving countries. Therefore, these findings suggest that countries with a big size of remittance are predicted to be associated with a low level of growth which indicates a remittance curse effect on the countries' level of economic growth.