International Remittances Research Articles

Modelling the growth and cyclical effects of international remittances in Fiji

ABSTRACT We model the trend/permanent and cyclical associations between international remittances and GDP using annual data from Fiji from 1979 to 2020. An extended co-feature methodology which incorporates asymmetric effects in the cyclical models is used. The findings indicate a significant and positive association between the permanent components of remittances and GDP. The cyclical associations suggest that an increase in remittances is negatively associated with negative GDP shocks in recessions providing some support for its function as an insurance mechanism. Positive shocks to remittances are not associated with positive GDP shocks suggesting that remittances may not contribute to an overheating economy. The findings stress the importance of cyclicality in the association between remittances and GDP. Policymakers benefit with information on how remittances influence economic activity in different phases of the business cycle.

Migrant Remittances and Human Security

The estimated number of people who live in a country other than their country of birth has raised over the past five decades. With the rising number of migrants around the world, one of the significant implications of migrant movements, international remittances have increased over time and exceeded the level of official development aid described as government assistance dedicated to advance the economic development and prosperity of developing countries. Consistent with the rising level of international remittances, a proliferation of research examining the impact of remittances on development in remittance-recipient countries has occurred in recent years. While the effects of remittances upon development in recipient states have been broadly studied, the relationship between remittances and human security in remittance-recipient countries has been insufficiently investigated. In order to fill this gap, this study theoretically discusses and empirically examines the link between migrant remittances and human security. It argues that remittances enhance human security by providing remittance-recipients with extra income to meet their socioeconomic needs and increase their personal safety, which enable them to free from want and free from fear. The findings of quantitative analysis conducted based on a global data set show evidence that migrant remittances improve human security in remittance-recipient countries.

Adoption of mobile banking to promote financial inclusion among rural farming community: Drivers and satisfaction level perspective

This study investigates the factors driving mobile banking adoption and user satisfaction to enhance financial inclusion among rural farming communities, using survey data from 400 farmers. An unpaired t-test reveals a significant difference in receiving international remittance, fund transfers, mobile recharge, and allowance during and before COVID-19, but no significant difference in cash-in, cash-out, and utility bill payments. During the pandemic, most mobile banking transactions increased in volume and frequency. The result also reveals that the majority of rural people (approximately 88 %) enjoy mobile banking services. The Index value of farmers' satisfaction level towards mobile banking transactions indicates that respondents were satisfied with various mobile banking transactions but were dissatisfied with the higher service fees. Logit estimation shows that age, education, income, farm size, and distance from the bank branch were the primary factors driving the adoption of mobile banking among rural farming communities. However, expansion of agent service, reduction of service charges, and protection from fraudulent transactions are essential for expanding the adoption of mobile banking services in rural areas and accelerating their financial inclusion.

Association of international remittance with satisfaction and utilization of maternal healthcare services in Nepal: A secondary analysis of two cohort studies

Association of international remittance with satisfaction and utilization of maternal healthcare services in Nepal: A secondary analysis of two cohort studies

The Impact of Digitalization on International Remittances in Developing Economies: The Paradox of Institutional Development

The Impact of Digitalization on International Remittances in Developing Economies: The Paradox of Institutional Development

Analyzing the Influence of International Remittances on Multidimensional Poverty: Insights from BRI Countries

ABSTRACT Efforts to facilitate international remittances hold substantial potential to impact various dimensions of poverty, underscoring the importance of comprehending this relationship in developing economies. International remittances between Belt and Road Initiative (BRI) countries have shown a marked growth trajectory. Unlike other studies that focus on the impact of remittances on income-based poverty in developing countries, this research delves into a more comprehensive analysis of how remittances affect various facets of poverty. Therefore, this paper aims to estimate the broader global implications of international remittances on multidimensional poverty in selected BRI countries. This study applied Driscoll-Kraay and Fully Modified Ordinary Least Square estimators to evaluate international remittances’ impact on MPI in BRI countries between 2010 and 2022. The results reflected a significant effect on countries that have contributed to the Belt and Road Initiative, with its impact on MPI courtesy of political stability, international remittances, agricultural growth, and forest plantation. Besides, the results of the Granger causality indicated a bi-directional causal link between forest plantation and MPI and a uni-directional causal link between MPI and international remittance. Countries along the BRI should enact policies to attract more remittances and design strategies to reduce unemployment and poverty.

How altruism works during a pandemic: Examining the roles of financial support and degrees of individual altruism on international remittance

AbstractWhile the importance of international remittances has been recognised globally, understanding how public subsidies and the degree of individual altruism affect remittance behaviour remains limited. Although international remittances were predicted to decline drastically in the early stages of the COVID‐19 pandemic, remittance data proved that they were ultimately resilient to the anticipated negative shock of 2020. Potential reasons include altruistic motivations among migrants and economic stimulus programmes in large economies; however, a detailed investigation from a micro‐perspective is lacking and urgently needed. This study examines the impact of financial support in host and home countries and individual altruism on international remittances using unique data from foreign care workers in Japan. Our panel data estimation shows that emergency cash transfers from the host country positively affected migrant remittance amounts; however, no crowding‐out effects were observed due to subsidies from home governments. The heterogeneous analysis also reveals that highly altruistic remitters were more likely to send money home after receiving cash transfers in the host country. The results support the claims of international organisations that the resilience of remittances was supported by altruism and public financial support during the pandemic.

International remittances and labor supply in Nigeria: Do educational attainment and household income matter?

AbstractThe effect of remittances on the labor supply decisions of recipients remains a subject of contention. To contribute to the debate, we investigate how the educational attainment and household income of remittance recipients shape their decisions to work. Using data from the 2018–2019 living standard measurement survey for over 61,000 Nigerians and applying the instrumental variable probit and Tobit techniques, we find that remittances are associated with an occupational switch from agriculture to nonagricultural (paid jobs and nonfarm enterprises) works. Specifically, the results show that remittance recipients are more likely to exit or reduce the hours worked on the farm, regardless of educational attainment and household income status. On the other hand, remittances promote labor supply to paid jobs and nonfarm enterprises, especially among the less educated in Northern Nigeria. In terms of household income, the positive effect of remittances on nonfarm jobs only holds for individuals in the top income quartile, regardless of their region of residence. Our findings are robust to alternative estimation techniques and hold important cues for policymakers.

The Moderating Role of Institutional Quality in the Relationship between Foreign Capital Inflows and Stock Market Development: A Panel Data Analysis

The study examines the impact of foreign capital inflows (FCI) on stock market development (SMD), with a specific focus on the moderating role of institutional quality (IQ). The study uses a panel dataset of 28 emerging economies for the period of 1998 to 2022. The findings reveal that both international remittances (REM) and foreign portfolio investment (FPI) have a significant positive impact on SMD. These findings imply that REM inflows enhance the availability of financial resources in the economy, promoting stock market growth and stability. Similarly, FPI increases market liquidity and fills the saving-investment gap in the host country, thereby increasing SMD. However, the results show that foreign direct investment (FDI) has a significant negative impact on SMD. This finding implies that FDI could negatively affect SMD in the host country due to the diversion of investments from the stock market to other business ventures, profit repatriation, and crowding-out effects on domestic investment by creating strong competition in the input market, making it difficult for listed domestic firms to operate. Moreover, the study reveals two unique and interesting findings. First, official development assistance (ODA) has a significant negative impact on SMD, suggesting that ODA reduces SMD due to the misallocation of resources due to aid conditions and economic instability, and the crowding-out effect on private investments. Second, IQ positively moderates the relationship between all forms of FCI and SMD in the sampled countries, implying that host countries with a good institutional framework and high IQ tend to experience high SMD.

Migrant remittances and the adoption of information and communication technology

In this study, we demonstrate that migrant families adopt ICT more than non-migrant households, the diffusion is higher among the recipients of remittances resulting from the long-duration, long-distance international migration than the short-duration, short-distance migration, and that foreign remittance recipients adopt advanced technologies to a greater extent compared to domestic remittance-recipients. We empirically test these hypotheses by using data on 160,624 households from the 2019 to 20 round of the Pakistan Social and Living Standards Measurement Survey and employing an instrumental-variable strategy as well as generalized two-step Heckman and Augmented Inverse Probability Weighting estimators. We come up with evidence of the significant effects of remittances on ICT adoption. Households with at least one domestic or international migrant, on average have 0.27 per capita mobile ownership and 0.12 higher probability of having internet at home compared to non-recipient households. This effect is visible more among international-remittance than domestic-remittance-receiving households. ICT adoption also increases with the amount received. We find that remittances accelerate the adoption of smartphones and social media apps. Besides, while international remittances substantially increase the use of smartphones, internet and social media apps, domestic remittances mainly improve basic phone adoption. Remittances also help reduce the rural-urban and male-female digital divide.

Digital financial inclusion, international remittances, and poverty reduction

Ensuring access to and usage of formal financial services through digital devices can be referred to as “digital financial inclusion” (DFI). In recent years, there has been a growing trend in the use of financial services, including money transfers through mobile phones. This study applies mobile phone subscriptions as a proxy to measure the degree of DFI and explores the individual effects of DFI and remittances and their interaction effects on poverty conditions in developing countries. Using panel data from 2000 to 2020 for 123 countries and employing the dynamic generalized method of moments estimation, the results reveal that DFI and remittance inflows help ameliorate poverty in developing countries. Furthermore, we find that the coefficient of the interaction term between DFI and remittances is statistically significant and positive, suggesting that the impact of DFI on poverty alleviation could weaken as remittance inflows increase in the remittance-receiving country and vice versa.

Legal Protection for Consumers and Organizers in Organizing Non-Bank International Money Transfers (Cross Border Remittance)

This research investigates the regulatory and supervisory system for non-bank international remittance service providers within the applicable legal framework. Through a descriptive-analytical approach, this research explores legal protection mechanisms for consumers and the role of government institutions in ensuring compliance and protection of consumer interests and market stability. Data was collected through analysis of regulatory documents, literature, and interviews with experts in the financial industry. The research findings highlight challenges in implementing regulations, a lack of consumer awareness, and the need for technological innovation to strengthen monitoring and reporting of financial transactions. Recommendations include strengthening international cooperation, consumer education, strengthening compliance and law enforcement, technological innovation, and collaboration with industry

Role of international remittances in poverty alleviation: A panel data study of developing countries

Remittances are the funds sent by individuals to their home country from the host country and are the main source of foreign funding after FDI. Remittances are a crucial source of subsistence for the countries that are still in developing phase. Due to of the increasing scale and effect on the origin country, the international remittance flows into the developing country have gained the attention of numerous analysts from all over the world. This study examines the role of foreign remittances in poverty alleviation utilizing the panel data set of Asian countries, precisely nine developing countries. For the dependent variable this study uses poverty gap and the independent variables are Remittances as percentage of GDP, Per capita GDP, External debt as percentage of GNI and Trade openness as percentage of GDP. The findings reveal that foreign emittances have a significant role in alleviating poverty gap. The results of the random effect model showed that a 1% increase in international remittances as percentage of GDP leads to a decrease of 65.932% in poverty gap at $1.90 poverty line in the sample developing economies from 1990-2019. In addition, the results indicate, trade openness and per capita GDP decrease poverty and external debt seems to increase poverty.

Do remittances mitigate poverty? Evidence from selected countries in Africa, Asia and Latin America

The overall objective of the Sustainable Development Goals is to end poverty in all its manifestations by 2030. To achieve this, international remittance inflows have been identified as crucial external financing, especially for developing countries, to secure the resources needed to improve the living conditions of the poor in these countries. It is on this premise that this study investigates the nexus between remittances and poverty in selected countries in Asia, Africa and Latin America, given that these regions receive the highest amount of remittances globally. The study uses annual data on 38 top recipients of remittances between 1990 and 2021. To ensure the robustness of the results, the study employs two indicators of poverty: household consumption expenditure and poverty headcount. On the methodological front, the study addresses the issue of cross-sectional dependence in a panel study and also corrects for endogeneity, using both static and dynamic methods of analysis, respectively. Empirical findings from the cross-sectional dependence test confirm the interdependence of countries in the study. Interestingly, the study confirms the optimistic view that remittance reduces poverty in the selected countries. This finding is consistent for the two poverty indicators regardless of the methodology adopted. The study concludes that remittance inflows play a pivotal role in alleviating poverty in the selected countries. Based on the findings, governments in the three regions are advised to devise appropriate policies and structures that can support and channel the proceeds from remittances to productive ventures to reduce the incidence of poverty in their respective countries.

Addressing rural energy poverty and rural-urban energy access gap in developing countries: does international remittances matter?

ABSTRACT Alleviating rural energy poverty and inequality in rural-urban energy accessibility is a panacea for rural economic development. Researchers and policymakers have underscored the importance of remittances in socio-economic development; however, the role of remittances on rural energy poverty and disparity in rural-urban energy access remains under-researched area. This study, therefore, investigates whether remittances contribute to enhance rural energy poverty and rural-urban inequality in energy access in 135 developing countries from 2000–2020. Evidence from cross-sectional and endogeneity-corrected results supports that international remittance inflow substantially reduces rural poverty and rural-urban inequality in energy access. The results also indicate that the effect of remittance on rural energy poverty and rural-urban inequality in energy access depends on the state of countries’ financial development and GDP per capita, indicating that remittances alleviate rural energy poverty and inequality in rural-urban energy accessibility in countries with higher access to credit and per capita GDP. We documented that these findings differ across income groups. The policy implications are discussed.

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.

Industry 4.0 in Finance, Digital Financial Services and Digital Financial Inclusion in Developing Countries: Opportunities, Challenges, and Possible Policy Responses

Fintech and the adoption of Fourth Industrial Revolution (industry 4.0) technologies have expanded the provision and uptake of digital financial services (DFSs) globally. Digital transformation in the financial industry intended to modify financial service provisioning by reducing the costs of accessing and challenges such as inaccessibility due to remoteness, not having a bank account, not having a credit history, or having erratic incomes. Digital financial inclusion (DFI) aims to ensure that financial services, such as deposits, payments, transfers, withdrawals, investments, accessing insurance and credit, checking account balances, receiving money, and making international remittances, are conducted conveniently, easily, safely, reliably, and affordably. DFI focuses on ensuring access to financial services through digital channels and platforms for individuals, businesses, and households, to promote financial inclusion for all stakeholders, especially previously financially excluded groups. Through a critical review of the literature, this study explores the opportunities and challenges of DFI or the adoption and use of DFS. The review unpacks the possible benefits of using DFSs, which include the broadening financial inclusion, increasing diversity and innovation in the financial services sector, attainment of the SDGs, reduction of poverty, increased economic growth, and minimization of the gender financial inclusion gap, as well as reduction in inequalities. The constraints include the inadequacy of digital infrastructure, taxes on DFS, literacy challenges, digital exclusion, poverty and the gender divide, risks, and lack of trust in the financial services sector. The study recommends appropriate regulation and oversight, literacy enhancement initiatives, investment in digital infrastructure, and increased consumer protection as measures to improve DFI in developing countries.

International Remittances, Domestic Sharing, and Income Inequality in Senegal

This study examines the impact of international remittances on internal cash transfers in Senegal using instrumental variable analysis with a large sample of individuals aged 13 and above. The findings reveal a direct internal sharing effect of international remittances. Individuals receiving such remittances are 26 per cent more likely to make internal cash transfers, with wealthier recipients showing a stronger propensity. Notably, the poorest individuals benefit the most. When international remittances and internal cash transfers coexist, the Gini index is 3 percentage points lower than in scenarios without international remittances and 9.2 percentage points lower than in scenarios with international remittances but no internal sharing, emphasizing their redistributive nature. These results hold across recipient locations and various econometric approaches.

ЕФЕКТИВНІСТЬ КРИПТОВАЛЮТ ЯК ЗАСОБУ МІЖНАРОДНИХ ПЛАТЕЖІВ: АНАЛІЗ ВАРТОСТІ, ШВИДКОСТІ ТА БЕЗПЕКИ ТРАНЗАКЦІЙ

This article focuses on the effectiveness of using cryptocurrencies as a means for international payments, with an emphasis on the analysis of cost, speed, and security of transactions. The aim of the study is to explore the potential of blockchain technologies to optimize international financial operations. This research considers the performance of cryptocurrencies in international payments, focusing on an analysis of cost, speed, and security of transactions, utilizing data from various sources and case studies. Blockchain technologiessuch as Ripple and Solana demonstrate high throughput, capable of processing up to 65,000 transactions per second (TPS).In comparison, traditional banking systems offer significantly lower processing speeds, withBitcoin handling around 7 TPS and Ethereum up to 15 TPS. The anticipated Ethereum 2.0 network upgrade projects an increase to 100,000 TPS, significantly enhancing their potential in international payments. Traditional banking transactions can incur fees of up to $50 USD, whereas blockchain networks can reduce costs to less than $0.01 per transaction. The implementation of distributed ledger technology could save up to $27 billion by 2030 on international transactions. According to research, the average cost of an international remittance is 6.4% of a $200 transaction, indicating the potential for significantsavingsthrough the adoption of cryptocurrencies. Cryptocurrency payments are protected using cryptographic methods and decentralization, reducing the risks of fraud and attacks. By adhering to "privacy by default" principles, transaction confidentiality can be further enhanced, including generating new addresses for each transaction. Regular security audits and multi-factor authentication provide an additional layer of protection. It can be asserted that blockchain technology offers significant advantages in speed, cost, and security of transactions, which could radically transform the landscape of international trade and financial transfers. The practical significance of the research lies in identifying the potential of cryptocurrencies as a reliable, cost-effective, and secure tool for international payments, which may alter the global money transfer system.

Expenditure decisions on international remittances received by households in Ghana

Expenditure decisions on international remittances received by households in Ghana