The Impact of Remittances on Economic Growth in Developing Countries: Empirical Evidence from Turkey
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Tarih
22.08.2020
Yazarlar
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Erişim Hakkı
info:eu-repo/semantics/openAccess
Özet
Remittances are defined as foreign exchange that workers who live and work abroad send to
their home countries to support their families or to make investments. Remittances have a vital
importance for developing countries and represent important injections to the sending countries
of migrant workers. Turkey is a developing country and has around 6.5 million Turkeyoriginated people living in the world. Most of them are living in developed Western-Europe
countries. Turkish economy has an import-oriented growth and remittances are one of the most
important items for foreign exchange inflows in case of a decrease in export or tourism
revenues.
In this study, the nexus between remittances and economic growth for Turkey is investigated
for the period 1994-2018 by using annual data. In this context, the Johansen Cointegration
Analysis is firstly used to determine whether there is a long-term relationship between the two
variables, followed by the Granger Causality Analysis which is used for the investigate the
causality relationship between the variables. It is found that there is a unidirectional relationship
from economic growth to remittances in Turkey. Remittance flows into Turkey do not cause
economic growth. That means more important sources of GDP than remittances may affect
economic growth in Turkey. At this point it can be concluded that other foreign exchange
sources such as FDI, exportation or sectors like tourism and transportation could be the main
driving force of Turkey’s GDP. Besides, migration barriers, the duration of migration,
migration type are important determinants of remittances. Because Turkey gets most of it’s
remittances from Western European Union countries such as Germany, France, Netherlands
and Belgium, the impact of remittances may cause Turkey’s economic growth with higher labor
mobility in European Union. Also economic growth may effect remittances by the conversion
of these remittances into important investments that creates employment.
Açıklama
Anahtar Kelimeler
: Remittances, Economic Growth, Turkish Economy, Developing Countries, Causality Analysis
Kaynak
8th International Conference on Culture and Civilization
