Export Revenue and Remittances Sent from Migrants' Host-Countries

Abstract

This article investigates empirically how export revenue in migrants' host-countries influences the aggregate amount of remittances sent by migrants from these countries to their home-countries. It further investigates how the volatility of export revenue in migrants' host countries affects the volatility of the amount of remittances sent by migrants. The empirical analysis has been carried out on a panel dataset comprising 23 developed countries over the period 1975-2016. Using the fixed effects estimator, it has shown that a rise in export revenues is associated with a higher amount of remittances sent by migrants to their home-countries. Furthermore, higher volatility of export revenue generates a higher volatility of the amount of remittances sent. These findings have two policy implications. First, by improving the business environment for their exporting firms, and devising domestic policies that help reduce the volatility of export revenue, policymakers in the host-countries of migrants (mainly here, developed countries) would allow higher amounts of remittances to accrue from these countries to their home-countries. These remittances are well known to be critical for the promotion of economic growth and development of the home-countries of migrants.