Abstract
Purpose:This study analyzes the relationship between Remittance and Exports by using 32 years timeseries data from the period 1981 to 2012. Methodology:This study includes Regression analysis OLS, Granger causality test, , Eigenvalue test, stability analysis ,Augmented DickyFuller tests ,Error correction model , cointegaration and sensitivity analysis. Finding:The results show the negative effect of remittance on exports in the long run in Pakistan which is completely against previous studies to date. Implications:The Government of Pakistan should lower the barriers to remittance flows and reduce the transaction cost for migrants who send money home and make export market more competitive to have significant positive impact of remittances on export.
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