Empirical Economic Bulletin, An Undergraduate Journal


This paper seeks to evaluate the effects of foreign direct investment (FDI), official development assistance (ODA), and migrant remittances to economic growth in developing countries, while also taking into account the qualities of the institutions of the countries. This study uses the linear system Generalized Method of Moments (GMM) method as developed by Blundell and Bond (1998). Current research has been focused on adding institutions to growth models to understand how institutional quality can help improve outcomes in developing countries. This paper plans to further the discussion on how institutional quality affects FDI, ODA, and remittances. Institutional quality is measured using the World Governance Indicators, gathered by the World Bank. This study finds that remittances and FDI are important to economic growth. The findings also suggest that control of corruption may have an indirect effect on economic growth. Voice and accountability was also positive when examining remittances as well.