Abstract
This study determine how remittances affect economic growth in the developingcountries of East Asia and the Pacific region. The type of data in this study issecondary data with the form of panel data. This research was conducted in the period 2000-2019 in 11 developing countries in East Asia and the Pacific region. This study used Random Effect Model estimation to determine the influence ofindependent variables, namely GDP per capita with dependent variables, namelyremittances, working-age population, FDI, and trade openness. The result showsthat variable remittances and working-age populations positively and significantlyimpact economic growth in developing countries in East Asia and the Pacific region.The estimated results for FDI variables negatively and significantly affect developingcountries economic growth in East Asia and the Pacific region. Estimates for tradeopenness variables have no significant effect on developing countries economicgrowth in East Asia and the Pacific region.
Highlights
Economic growth is one measure to achieve the development of a country
Based on the empirical study conducted by Meyer and Shera (2017) in developing countries of the European region in the period 1999-2013, the results show that remittances have a positive impact on growth and that this impact increases at higher remittance rates compared to gross domestic product (GDP)
The first test was carried out using the F-Restricted test which aims to determine which method of pooled least squares (PLS) panel data regression or fixed effect model (FEM) is better used in research
Summary
Economic growth is one measure to achieve the development of a country. Economic growth is defined as a process, due to the influence of factors in economic growth. A country achieves economic growth if it experiences an increase in gross domestic product (GDP). Economic growth can be influenced by many factors because it is very complex (Tahir, Khan, & Shah, 2015). One of the factors is domestic factors such as macroeconomic policies, human capital, good governance, and national savings for economic growth. External factors such as international capital flows are important to increase economic growth especially for developing countries (Tahir, Khan, & Shah, 2015)
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