School of Business and Economics (SBE)

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Browsing School of Business and Economics (SBE) by Subject "ARDL, Granger Causality, Pakistan"

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    Impact of Remittances on Economic Growth of Pakistan
    (University of Management and Technology, 2018) Muhammad Moazzam Hassan
    One of the major international financial resources in the world is remittances which occasionally exceeds the foreign direct investment flows in few economies of the world (Gapen et al., 2009). There had been number of research articles and debates on the economic growth sources within developed and under developed countries (Pradhan, Upadhyay & Upadhyaya, 2008; Fayissa & Nsiah, 2010). Remittances considered holding the strong influence on the growth of an economy. The purpose of this research study is to examine the influence of worker's remittances on the economic growth along with few economic indicators in Pakistan. Panel data for the time period 1971 to 2016 is taken to examine the empirical linkage between the worker's remittances and economic growth. By applying the ARDL and bound cointegration approach, the study found that there is a positive impact of remittances on the economic growth of Pakistanin the short run and long run. This study also elaborated that worker's remittances impact increases at higher levels relative to economic growth in Pakistan. Furthermore, the study concluded positive association among the FDI, labor force, capital and economic growth for both short run and long run. However, no statistically significant linkage found between economic growth and net exports in Pakistan. The study also concluded that unattractive rate, lack of proper foreign policy, transactions through freelancing business, AML/compliance, rebates on home remittances and religious factors hurdles the growth of remittances.