Authors
ABSTRACT
The role of overseas financial inflows in the economic growth process has largely been documented, particularly in relation to remittances from diaspora populations and Foreign Direct Investment (FDI). This study uniquely highlights the often-overlooked non-monetary remittances, which include tangible goods, skills, and technical knowledge. Using panel data comprising 132 developing countries from 2000 to 2020 and the system-GMM estimation technique, the study investigates the dynamic impacts of these financial inflows on economic growth. The findings reveal that non-monetary remittances have a significant positive effect on GDP per capita growth, with a 1% increase in non-monetary inflows contributing to a 1.2% to 2% rise in economic growth— exceeding the impacts of both monetary remittances and FDI. These new insights imply that establishing frameworks to facilitate and incentivize the transfer of physical products and technical expertise from overseas migrants is vital for promoting sustained economic development in developing countries.
