The Effect of Diaspora Remittances on the Economic Growth in Kenya.
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Date
2018Author
Amugune, Catherine J
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
The purpose of this research paper was to establish the effect of Diaspora remittances
on the economic growth in Kenya. Data for the period 2008-2017 from Central Bank
of Kenya website, Kenya National Bureau of Statistics website and the World
Economic Development Indicators website was used. To establish the effect of
Diaspora remittances on the economic growth in Kenya, lending Interest rates and
Inflation rates were also used. The study employed Ordinary Least Squares regression
model. Normal plots and frequency histograms were used to test for normality.
Descriptive statistics for normal distribution curves were extracted and analyzed.
Correlation analysis was employed to determine the nature of relationship between
variables. Independent Variables were tested for multi-collinearity to assess the effect
they have against each other in the regression model. Scatter plots testing method tested
for linearity where residual analysis was carried out to validate the assumptions of
linearity in the regression. Homoscedasticity was tested using scatter plots for
standardized residuals. Multiple linear regression analysis model was then employed to
determine the effects of diaspora remittances on economic growth in Kenya. The study
found that both diaspora remittance and interest rates positively impact the economic
growth in Kenya although the effect is not statistically significant at confidence level
of 90%,95% or 99%. whereas Inflation rates had a significant negative effect on GDP
growth rate in Kenya at 99% confidence level. The results show that emphasis should
be placed on formal records on diaspora population by establishing formal channels
through which remittances can be channeled with ease and at an affordable cost. Tax
incentives would encourage investment in the home economy. Inflation should be
managed as it erodes economic growth.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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