Abstract
This study investigates the asymmetric impact of personal remittances on economic growth (EG) having financial development (FD) and institutional quality (INQ) as control variables using panel data from 1996 to 2019 on the ten largest remittance-earning economies of the world. It employs the pooled mean group (PMG) technique and Dumitrescu-Hurlin (D-H) causality check. The outcomes reveal that personal remittances asymmetrically impact economic expansion, the positive shocks of remittances cause EG negatively, while its negative shocks affect the latter positively with an overall positive impact. Both FD and INQ influence the long-run EG positively. No evidence of the threshold effect of FD on economic expansion is found. The D-H causality test produces several bidirectional and unidirectional causalities. Remittances and INQ directly cause EG, while FD causes it indirectly through the INQ channel. The outcomes offer implications for policymakers to continue developing their “financial markets and institutions” to improve the “access, depth, and efficiency” of financial services, progress INQ, and strive for more remittances to augment EG.
Personal remittance; Financial development; Institutional quality; Economic growth.