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A Johansen Cointegration Test for the Relationship between Remittances and Economic Growth of Japan

Naidu, Suwastika and Pandaram, Atishwar and Chand, Anand (2017) A Johansen Cointegration Test for the Relationship between Remittances and Economic Growth of Japan. Modern Applied Science, 11 (10). pp. 137-151. ISSN 1913-1844

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    Abstract

    Remittance inflows have been a key stimulus to economic growth of many developing countries. There is scant literature available on the impact of remittance inflows and outflows on the economic growth of the large developed countries. For instance, there is little literature on the impact of remittance inflows and outflows on the economic growth rate of Japan. Hence this research objective of this paper is to investigate the relationship between ‘remittance inflows’ and ‘outflows’ on the ‘economic growth rate’ of Japan. The paper by utilizing the World Bank data set and the econometric model namely the Granger Causality Model to test and analysis the impact of remittance inflows and outflows on the economic growth rate of Japan. The findings show that in the long run, a 1% increase in remittance outflows will decrease GDP growth rate by 0.000793%. In the short run, a 1% increase in remittance outflows and inflows will decrease GDP growth rate by 0.000599% and 0.000327% respectively. The Japanese government should encourage retired Japanese workers to return to the labour market and effectively contribute to the workforce and retired workers can be re-trained so that less foreign migrant workers are needed and this will reduce remittance outflow.

    Item Type: Journal Article
    Subjects: H Social Sciences > HC Economic History and Conditions
    Divisions: Faculty of Business and Economics (FBE) > School of Management and Public Administration
    Depositing User: Fulori Nainoca
    Date Deposited: 06 Oct 2017 10:05
    Last Modified: 18 Apr 2018 10:14
    URI: http://repository.usp.ac.fj/id/eprint/10245
    UNSPECIFIED

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