KnE Social Sciences

Published date: Sep 10 2025

Journal Title: KnE Social Sciences

Issue title: The International Conference on Economic and Sustainable Development (ICESIDE)

Pages: 42 - 51

DOI: 10.18502/kss.v10i20.19615

Alvin Sugeng Prasetyoalvin.prasetyo@trunojoyo.ac.idDepartment of Economics, Faculty of Economic and Business, Universitas Trunojoyo Madura

Crisanty Sutristyaningtyas TitikDepartment of Economics, Faculty of Economic and Business, Universitas Trunojoyo Madura

This study aims to provide empirical evidence on whether remittances contribute to increasing household consumption and economic growth in Indonesia. The study employs quarterly time series data spanning the period from 2010Q1 to 2024Q4. To estimate the long-run relationships among the variables, the study applies three econometric techniques: Fully modified ordinary least squares (FMOLS), dynamic ordinary least squares (DOLS), and canonical cointegrating regression (CCR). The empirical findings reveal that remittances from Malaysia have a positive but statistically insignificant effect on household consumption. In contrast, remittances from Hong Kong and Saudi Arabia show a positive and statistically significant impact on household consumption. Meanwhile, remittances from Taiwan exhibit a negative and insignificant effect. Regarding economic growth, remittances from Malaysia and Hong Kong are found to have a positive and significant influence. Remittances from Taiwan have a positive but insignificant effect, while those from Saudi Arabia exert a negative and statistically insignificant impact on Indonesia’s economic growth.

Keywords: fully modified ordinary least squares, remittances, household consumption, economic growth

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