COVID- 19 impact on remittances and economic growth in three transitional countries in ASEAN: evidence from nonlinear analysis

The World Bank has forecast that the adverse economic impact of the ongoing Covid-19 induced recession in advanced countries and oil-producing countries would lead to a steep decline in worldwide remittances (REM) in 2021 and 2022. It is expected that economic growth in Cambodia, Laos, and Vietnam (CLV), known as transitional economies is expected to be hit hard. This paper explores the nonlinear effect of remittances on economic growth using a panel of three CVL countries for the period 2000-2017. While remittances positively contribute to long-run economic growth, the nonlinear analysis reveals that remittance inflows have an asymmetric effect on per capita GDP. The effect of negative partial sum decomposition is higher than that of the positive partial sum decomposition of remittances. Further, our results show that ICT and remittances are found to be having a mutual growth effect in these transition economies