The impact of remittances on economic growth: an empirical investigation of 11 CEE countries during the COVID-19 pandemic and the Ukrainian crisis

Abstract

Purpose This study aims to explore the impact of remittances on economic growth in Central and Eastern European (CEE) countries from 2010 to 2022. It particularly emphasizes the effects observed before and during the COVID-19 pandemic and the Ukraine crisis within this timeframe, as these events have significantly influenced the dynamics of migration and remittances in the region. Design/methodology/approach This study applies different econometric techniques such as ordinary least squares, fixed-effects model, random-effects model and generalized method of moments-dynamic panel data. Findings Based on the results generated, the effects of personal remittances, exports, foreign direct investments, gross capital formation, final consumption expenditure and exchange rates are very important elements for stimulating the economic growth of CEE countries. Research limitations/implications The quality and coverage of statistics in many nations continue to be a concern when examining the impact of remittances on economies. Therefore, how best to quantify the effect of remittances to developing nations is still a matter of debate. Practical implications Remittances should be considered as an opportunity by policymakers when devising appropriate regulations. CEE countries must enact well-considered policies that consider the local and international environment. Originality/value This study stands out for its originality, offering fresh perspectives and advanced methodology that contribute significantly to the existing body of knowledge in the field. By addressing the impact of remittances on economic growth in CEE countries, the authors not only provide unique insights but also pave the way for further exploration and advancement in this area of research.