Global Connections: Examining the Role of Remittances in Economic development

Abstract

Abstract This article surveys the main effects of remittances on economic development. The focus is to emphasise how the money sent back by emigrants in their home countries impacts factors such as imports or foreign direct investment that can influence the economy’s evolution. All countries from European Union countries were included in the analysis, but we have been focusing on the post-communist EU countries, which were the focus of this article. The econometric model used is the multiple regression with the fixed-effect model (FEM) and the random effect model (REM) based on panel data. Our findings underline that remittances have a solid and significant influence on the economic development of emigration countries, especially among former communist countries. Finally, the research strengthens the current literature on remittances and economic development through an empirical analysis that focuses on recent data.