Exploring the Determinants of Worker’s Remittances: An Application of LASSO Technique

Abstract

Remittances are a significant source of foreign income in Pakistan. In order to maintain the level of remittances stables there is need to explore the significant determinants of worker’s remittances. Therefore, LASSO technique is adopted to define the potential features of worker remittances. ARDL bound test has been applied to explore the long run and short run effect of potential determinants on workers’ remittances. The results suggest in the long run the internal conflicts and investment return of Pakistan have negative, whereas, the real effective exchange rate, external conflicts and major agricultural crops have positive impact on workers’ remittances of Pakistan.