Remittance Flows Research Articles

Retraction Note: Have international remittance inflows degraded environmental quality? A carbon emission mitigation analysis for Ghana.

Retraction Note: Have international remittance inflows degraded environmental quality? A carbon emission mitigation analysis for Ghana.

Statistical omissions as the stabilizing factor of net foreign assets in EU countries

In this paper, we investigate the effect of balance of payments statistical leakages (Net errors and omissions) on the external solvency of net foreign asset positions in the EU28 sample over the period 1995–2019. The Bohn (2007) error-correction reaction function approach adapted to a dynamic panel framework (pooled mean group estimator) yields evidence of a substantial improvement in the sustainability of external positions in one out of four analyzed countries (compared to only one to three countries reporting deterioration), once the extent of hypothesized trade and non-interest income misreporting is accounted for. These findings may reflect the presence of a possible association between statistical omissions and current account transactions linked to remittances flows or tax optimization behavior, as the statistical leakages are sensitive to changes in corporate tax rates and international migrant stock.

Covid–19: Foreign Remittances and Migrants' Well-Being in Bangladesh

ABSTRACT: The COVID-19 pandemic has disrupted every sphere of life and livelihoods around the world. Many migrant workers from the Global South, such as Bangladesh, working in the Gulf countries were reported to be impacted by COVID-19, but the direct voices and views of migrant workers themselves and their households are largely unknown. This research adopts a mixed-method approach to assess the impact of the pandemic on foreign remittances to Bangladesh and the well-being of migrant households. The primary data collection involved fieldwork conducted in four migrant-dense villages, situated in Mymensingh and Meherpur districts of Bangladesh. A set of 221 household surveys was administered. In addition to the surveys, 52 semi-structured interviews were carried out, engaging with key individuals at community, district, and national levels such as heads of migrant households, returnee migrants, managers of migration financiers, owners of labor recruiting agencies, officials of the district manpower office etc. Results show that although a significant number of Bangladeshi migrant workers returned home since the COVID-19 pandemic and the outflow of Bangladeshi migrant workers shrank by 69 percent in 2020, remittance inflows at the national level witnessed a growth of 18.5 percent in 2020, which did not resonate with the negative prediction made by the World Bank. However, this research found a macro-micro mismatch, indicating a substantial decline in remittances at the household level. This might be due to the existence of a robust unofficial channel for remittance sending. Approximately 62% of migrant households in the case study sites experienced a 32% reduction in remittances during the COVID-19 pandemic compared to the pre-COVID-19 period. In response to the decline in remittance income, a majority of migrant households (77%) resorted to utilizing their accumulated savings. Additionally, approximately 20% of households sought financial support and borrowing from friends, relatives, and community members. At the community level, the local economy experienced a sharp downturn, leading to a ripple effect that affected everyone within the community. To address the unofficial remittance sending, the Government of Bangladesh should implement effective measures to curb unofficial remittance channels. Upskilling initiatives have the potential to alleviate the vulnerability of Bangladeshi migrant workers, fostering increased income stability. Policymakers should place greater emphasis on crafting savings instruments tailored to the specific needs of migrant households. It is also imperative to prioritize an income diversification policy at the community level to mitigate dependence on remittances.

The Trends of Foreign Employment and Remittance Inflow in Nepal

This paper discusses the employment situation of Nepalese youth in foreign countries and its impact on remittance. The main objective of this study is to assess the impact of foreign employment on remittance. This study is based on secondary data and quantitative analysis is adopted. The available data has been interpreted using descriptive statistics as well co-relation coefficient test. The study shows that the remittance inflow in the country has highly increased, though migration of youths has decreased compared to past years. There is a vast gap between male and female migrants. The number of male migrants is substantially high as compared to female migrants and the number of youth migrants going abroad for foreign employment is studied to be high in Gulf countries. The study further reveals that migration has a huge contribution to the nation’s economy as well as to the livelihood of their households with the inflow of remittance.

Remittance inflows and financial development in Sub-Saharan African countries: Does governance matter?

BackgroundThe surge in remittances in most sub-Saharan African countries motivated this study to establish whether remittance inflows enhance financial development and whether governance plays any significant mediating role in the nexus between financial development and remittance inflows. PurposeThe study examines the impact of remittance inflows on bank-based financial development in 26 sub-Saharan African (SSA) countries using three proxies of bank-based financial development. The study also examines whether government regulatory quality and effectiveness modulate the impact of remittance on bank-based financial development. MethodThe generalised method of moments (GMM) estimation technique is used to examine this linkage. ResultsThe results show that when financial development is proxied by liquid liabilities and bank deposits, remittance inflow is found to have an unconditional positive impact on bank-based financial development, while governance is found to reinforce the positive relationship between remittance and financial development. However, when financial development is proxied by deposit money bank assets, remittance is found to have no profound effect on bank-based financial development, but it was found to interact with government effectiveness to yield a positive influence on financial development. ConclusionOverall, remittance inflows were found to have an overwhelming positive impact on the banking sector development. It was also found that good governance generally tends to reinforce the positive impact of remittances on banking sector development. NoveltyThis study adds value to the extant literature by providing answers to the role that governance plays in enhancing the impact of remittances on financial development in sub-Saharan African countries.

Does the inflow of remittances diminish unemployment? The role of political stability in MENA countries

PurposePrevious literature has investigated the connection amongst remittances, political stability and unemployment in remittance-receiving economies separately. Besides, they did not cover the Middle East and North African (MENA) region.Design/methodology/approachTo this end, this research uses the pooled mean group (PMG) method.FindingsThe findings suggest that the influence of remittances on lowering unemployment accelerates in recipient economies with high levels of political stability.Practical implicationsPolicymakers in MENA countries should vigorously pursue political stability, which plays a crucial role in boosting the influence of inward remittances on unemployment alleviation. This is accomplished by establishing solid institutions that contribute to ensuring fair politics, increasing citizens' trust in the government, enhancing the rule of law and protecting investors and prioritizing policies and programs that promote political stability.Originality/valueThis paper, therefore, aspires to empirically examine the impacts of inward remittances on unemployment via the moderating role of political stability in thirteen MENA-receiving countries from 1996 to 2020.

Abroad Migration of Labor and Flow of Remittance in Nepal

This paper defines and examines Nepal's labor migration situation and remittance flow. In a similar manner, this study seeks to identify the main labor migration-related issues and suggests solutions. People in Nepal do not have access to employment prospects because of the country's delayed industrialization. The socioeconomic standing of many migrant families has improved significantly as a result of labor migration. Although foreign employment improves the nation's economic situation, it has also brought forth a great deal of issues. These issues should be addressed by the relevant sector, as failure to do so could have serious negative effects on our economy.

Migrants Stock And Income: A Zoological Analysis Of The Remittance Flow Between India And 31 Pairs Of Countries

This research delves into the complex dynamics of remittance flows between India and 31 pairs of countries through a unique zoological lens, offering a novel perspective on the migratory patterns and financial implications of these flows. With the increasing interconnectedness of the global economy, remittances have emerged as a vital component of international migration. This study employs a zoological analogy to better understand the behaviors and patterns of these financial transfers, akin to the diverse species in an ecological ecosystem. Through a comprehensive analysis of migrants' stock and income levels, we investigate the multifaceted relationships between India and its partner countries, dissecting the characteristics that define these remittance flows. This analysis not only considers the raw numbers and amounts of remittances but also explores the underlying factors, including socio-economic conditions, policies, and historical ties, which shape the migration corridors. Our zoological analysis reveals that remittance flows can be likened to various species in the animal kingdom, each with its unique traits and contributions to the ecosystem. Some flows may resemble migratory birds, representing consistent and reliable remittances over time, while others may be more akin to elusive predators, with sporadic and unpredictable contributions. The study further examines the impact of remittances on the economic well-being of both sending and receiving countries, shedding light on the intricate interplay between migrants' income levels and the socio-economic environments they inhabit. We identify how remittances can act as economic stabilizers, enhancing financial security for families in the source countries and boosting economic development in the recipient nations. The zoological approach to the analysis of remittance flows between India and 31 pairs of countries offers a fresh perspective that can enhance our understanding of this vital aspect of international migration. By recognizing the diverse "species" of remittance flows and their roles within the global ecosystem, policymakers and researchers can better tailor strategies to optimize the benefits and mitigate the challenges associated with these financial transactions.

Remittances inflow and economic growth nexus in Sub-Saharan Africa: Do institutional quality and macroeconomic stability matter?

The challenge of achieving “growth” without development in numerous developing countries, particularly within the African region, has instigated a discourse on the effects of institutional quality and the macroeconomic environment on the primary drivers of growth and remittance inflows. This paper seeks to scrutinize the interplay between capital inflow, remittances, and economic growth in Sub-Saharan African (SSA) countries, considering the moderating influence of institutional and macroeconomic stability. Employing a balanced panel data set encompassing 24 countries from 2005 to 2019, this study investigates the hypothesis that the impact of capital inflow on economic growth varies depending on the institutional quality and macroeconomic stability of the recipient countries. The study employs a DOLS panel-based cointegration approach, revealing heterogeneous slope coefficients, as evidenced by the slope homogeneity test. Furthermore, the cross-sectional dependence test indicates that the panels are independent across different sections. All variables are I (1), as affirmed by the CADF and CIPS tests for unit root.The cointegration test conducted by Pedroni, Kao, and Westerlund establishes that the examined variables maintain long-term relationships. The long-run estimated coefficients derived from the regression analysis using DOLS cointegration demonstrate a positive correlation between per capita income and remittance when interacted with macroeconomic policy. Consequently, addressing institutional quality and macroeconomic stability is imperative, as they play a pivotal role in moderating the efficacy of remittance inflows and their impact on the economic growth of the region.

Impact of skilled labour migration on energy, environment and economic growth in home and host countries: A computable general equilibrium analysis

AbstractMigration of both skilled labour force can alter economic conditions and environmental sustainability of both host and home countries. Therefore, this study aims to explore the effect of skilled labour force migration on economic growth, energy demand and environmental sustainability of home and host countries. This objective is realised by constructing a multiregional computable general equilibrium model for developed and developing countries. Furthermore, developing countries are subcategorized into four groups such as high income, upper middle‐income, lower middle‐income and low‐income countries. The results of policy simulations indicate that skilled labour migration can reduce the gross domestic product, welfare, energy consumption and carbon emissions in home countries, and the reverse is true for the host countries. Whereas the inflow of remittances to home counties can enhance their economic growth, energy consumption, and CO2 emissions, while reverse trend of remittances outflow is observed in host countries. Similarly, reverse migration can increase economic increase in developing countries along with increasing energy demand and carbon emissions. The study urges for developed countries for utilise skilled immigrants in environment friendly manufacturing industries.

Application of ARIMA model in forecasting remittance inflows: evidence from Yemen

Application of ARIMA model in forecasting remittance inflows: evidence from Yemen

Geopolitical risk and remittances in the Philippines: evidence from quantile causality

ABSTRACT This study investigates the dynamic causality link between global geopolitical risk and its two subindices and international remittance inflows in the Philippines, using monthly data from January 1989 to December 2022. We employ a Granger-causality in quantiles approach and find that higher variations (either positive or negative) in global geopolitical risk and its two subindices significantly Granger cause changes in remittances, implying that global geopolitical risk and its two subindices offer applicable value for predicting remittance inflows to the Philippines.

Do received remittances cause Dutch disease in developed and developing countries?

PurposeThe present study aimed to examine the effect of received remittance inflows on the price level ratio of the purchasing power parity conversion factor to the market exchange rate in 36 developed and developing countries from 2004 to 2020.Design/methodology/approachThe panel data conducted a comparative analysis and used panel least squares, regression with Driscoll-Kraay standard errors of fixed effect, random effect, feasible generalised least squares and maximum likelihood robust least squares to overcome the heterogeneity issue. Furthermore, the two-step difference generalised method of moments to overcome the endogeneity issue. Diagnostic tests were used to increase robustness.FindingsIn the studied countries, there was a statistically significant negative relationship between received remittance inflows and the price-level ratio of the purchasing power parity conversion factor to the market exchange rate. This relationship explains why remittance flows depreciate the real exchange rate. The study’s results also indicated that attracting investments can improve the quality of institutions despite high tax rates, leading to low tax revenue.Originality/valueThe current study findings enrich the understanding of policies of how governments should minimise tariff rates on capital imports and introduce export-oriented incentive programmes. The study also revealed that Dutch disease can occur due to differences in the demand structure and manufacturing development policy.

Economic and governance drivers of global remittances: a comparative study of the UK, US, and UAE to India

PurposeThe paper aims to analyse the impact of economic and governance factors on remittance inflows to India from the UK, USA and UAE. India is globally recognised as the largest recipient of remittances.Design/methodology/approachUsing a comprehensive time series data set spanning 1996 to 2022, the authors use an innovative non-linear autoregressive distributed lag model approach to examine the influence of economic growth, corruption control and employer availability in the three source countries on remittance inflows to India.FindingsThe results indicate that in the UAE, changes in economic growth and corruption control directly affect remittance outflows. However, the presence of employers in the UAE has minimal impact on remittance outflows to India. Regarding the UK, fluctuations in economic growth primarily drive remittance outflows to India. The effect of corruption control and employment opportunities on remittance outflows is marginal. In the USA, economic growth does not notably impact remittance outflows, whereas corruption control and employment opportunities significantly influence the outflows to India.Originality/valueThese findings have important implications for policymakers. Analysing macroeconomic factors from key remittance-sending nations offers valuable insights for Indian policymakers and their international counterparts to enhance remittance inflows. The study focuses on three countries that collectively contribute to about 50% of India's remittances, providing a unique contribution compared to the usual country-specific or regional focus in existing literature. Finally, leveraging these findings, NITI Aayog, an organisation dedicated to achieving India's sustainable development goals, can effectively monitor macroeconomic indicators related to significant remittance-sending countries.

Impact of COVID-19 on migrant remittances in South Asia

ABSTRACT This paper investigates the impact of COVID-19 on remittance flows to South Asia. Using a monthly panel data set of five South Asian countries (namely Bangladesh, India, Nepal, Pakistan, and Sri Lanka) for the period January 2020 to August 2021. This study, applying the pooled ordinary least square estimation method, generally, finds a positive impact of COVID-19 on remittance flows to South Asia. Further investigation reveals the existence of a non-linear (inverted U-shaped) relationship between COVID-19 cases and remittances. This means that with the initial covid spread leading to temporary restrictions affecting economic activity in home countries, remittances start increasing to support families’ income and consumption affected by the regulations. However, the very high levels of infection rates leading to continued lockdowns in home countries decrease the incentives for investment with substantially reduced economic activities, thus decreasing aggregate remittances. We found similar results when replacing infection rates with deaths from COVID-19. However, increasing COVID-19 infection rates and deaths in migrants’ host countries reduce remittances to migrants’ home countries.

Impact of Remittance on Financial Sector Growth in Nigeria: An Econometrics Approach

Remittance inflow is one of the major sources of foreign exchange not only to individuals and financial institutions but also to the economy as a whole. The level of remittance to Nigeria has been on the increase, yet the exchange rate has been very unstable with the naira falling against the USD dollars consistently. Despite different literature on the impact of remittance on the Nigerian economy as a whole, limited studies have been carried out on the effects of remittance on the financial sector of the economy. This study investigated the impact of remittance on the financial sector in Nigeria using data between 1986 and 2022. The choice of the period is to capture the effect on the Structural Adjustment Program (SAP) on the economy while also considering other macroeconomic factors and shocks in period thereafter. An Autoregressive Distributed Lag (ARDL) was employed. Evidence from the results revealed a long-run relationship between financial sector output, Remittances (REM), Cost of remittance (CRM), Trade Openness (TRO) and Exchange Rate (EXR). Meanwhile the cost of remittance was found insignificant. The empirical findings from the ARDL result show that there is a positive relationship between financial sector output, remittance inflow, cost of remittance, trade openness and exchange rate in Nigeria. Based on the empirical findings, the study recommended that government should employ policies that will encourage judicious utilization of funds received through remittances by channelling the funds into productive investment as it will encourage more inflow of remittances and make policy measures more stable to attract more remittances.

Economic Growth or Downfall? Reviewing the Economic Resonance of Remittances in Pakistan

Background: The remittance sent by migrant workers to their home countries has a significant impact on the country’s economic development. Remittance positively influences the economy and GDP of developing countries. migrant workers yearly send billions to their home countries. Remittance is incessantly outpacing a country's official development aid and has become the second most significant source of economic development other than the FDI (Foreign Direct Aid). Aim: The study aims to review, analyse and summarise the existing literature regarding the impact of remittance on Pakistan’s economy. Methodology: The study comprises a qualitative research design. Data was collected through numerous articles related to remittances and their impact on the economy, particularly, Pakistan’s economy and GDP growth. Results: The results of the study determined the positive impact of remittance inflow on Pakistan’s economy. The results discussed the increasing inflow of remittances from the fiscal year 2013 to the fiscal year 2022 along with the determinants of expected decline in remittance. Conclusion: The outcomes revealed the uprise in remittances inflow to Pakistan from FY13 to FY22. The study showed the yearly percentage of increasing remittances, along with highlighting the factors of the expected decline in the remittance inflow in the upcoming years.

Nexus between macroeconomic factors and remittance inflow in presence of ICT penetration: a panel data analysis of Bangladesh economy

Nexus between macroeconomic factors and remittance inflow in presence of ICT penetration: a panel data analysis of Bangladesh economy

Impact of Gross Domestic Product, Government Capital Expenditure, Interest Rates and Remittance Inflow on Domestic Cement Consumption of Nepal

Impact of Gross Domestic Product, Government Capital Expenditure, Interest Rates and Remittance Inflow on Domestic Cement Consumption of Nepal

Impact of Selected Factors on International Trade of Bangladesh: An Empirical Analysis

International trade is a vital driver of economic development for nations worldwide, and Bangladesh, as a developing country in South Asia, strategically utilizes trade as a key element in its economic growth agenda. This paper examines the impact of internal factors on Bangladesh's international trade, employing Ordinary Least Squares (OLS) regression analysis to analyze data spanning from 2000 to 2022. The study focuses on factors such as GDP, inflation, real interest rates, unemployment rates, government expenditure, population growth, remittance inflows, government expenditure in education, macroeconomic management, and tariff rates. The results reveal a strong statistical significance between the predictors and Bangladesh's international trade volume. Notably, personal remittances, government expenditure in education, and macroeconomic management index exhibit significant influence on international trade. The findings provide valuable insights for policymakers and stakeholders to enhance Bangladesh's trade performance, contributing to its sustainable economic development.