Empirical Study On The Determinants Of Fujian Remittances And Relationship Between Remittances And Economic Growth(1950-1990)

Remittances are an important income source of non-trade foreign exchange.The determinants of remittances and the effect of remittances on the economic growth to home country are not yet concluded.Our academic circles mainly analyze these problems from qualitative aspects,affirming the positive effect of remittances,but quantitative research is rare.This paper takes Fujian as an example,combining qualitative and quantitative studies,to explore the determinants of remittances and its effect on economic growth.This paper firstly combs the development of Fujian remittances from early New China to early Reform and Opening up,elaborates from remittances amount,remittances usage and remittances policy etc.aspects,and sums up the mechanism of remittances affecting economic growth during this period.Then,the time series model is constructed.The determinants of remittances and the effect of remittances on economic growth are explored through the ADF test,cointegration test,the establishment of error correction model and Granger causality test.The study shows that remittances would be increased when per capita income of family decreases.The remittances of that period have a strong altruistic motive,which is an inverse economic cycle effect.On the contrary,the effect of interest rates on remittances is small and negatively correlated with remittances.In addition,host country’s economy,the number of overseas Chinese and black market premiums have positive effects on remittances,while the political movement will reduce remittances.The remittances inflow has contributed to Fujian economy,but the contribution is very small.Finally,this paper puts forward some policy suggestions such as the investigation and preparation of remittance data,the adjustment of remittance and reasonable guidance etc.,which hopes to absorb more remittances and plays the effectiveness of remittances better.