Motives for remitting from Germany to Kosovo

Abstract

(...) The analyses of the motives for remitting in this research are based on an empirical quantitative dataset collected in 2009/2010. This dataset contains information on 225 Kosovo-Albanian migrants living in Germany and their corresponding rural origin households in Kosovo. This study design is innovative and exceptional for two reasons. First, because usually only one side of the remitting dyad is included in the analysis, i.e. the remitting migrant in the host country or the receiving household at the origin. Second, a new methodology is introduced in the analysis of motives for remitting. It is argued that the common, socio-economic perspective does not suffice to explain the motives for remitting. For this reason, the analysis starts with a common approach for the identification of determinants of remittances using Ordinary Least Squares (OLS). The results are then compared with an analysis based on the Theory of Planned Behaviour (TPB) applied in a Structural Equation Model (SEM). The TPB, borrowed from social psychology, is employed for the first time in this field of research. It is chosen with the purpose of widening the perspective on the motives of remitting through the representation of the inherent cognitive processes that underpin the decision-making process about remitting. The application of the TPB is based on three core constructs: the attitude towards remitting, the perceived norms surrounding remitting, and the perceived control over remitting. It is assumed that these three constructs shape the intention to remit. Additionally, socio-economic determinants, which have shown significance in the common approach, are included. The results of the OLS analysis generally comply with earlier empirical findings. The variables with significant impact on remittances can be split into three groups: (1) the closeness of the relation between the migrant and the origin household; (2) the financial capacity to remit of the migrant; and (3) the need for support by the origin household. It can be confirmed that the closer the relation between the migrant and the relatives at the origin, the better the financial endowment of the migrant; further, the more severe the need for financial support by the origin household is, the higher are the remittances. The results of the TPB approach indicate that the socio-economic determinants contribute to the explanation of the intention to remit only to a small extent. The main impact on the intention to remit stems from the attitude of the migrant towards remitting and the perceived norms on remitting. Consequently, if the migrant has a favourable opinion about remitting and feels that s/he is expected to remit, the intention to remit is stronger.