Personal Remittances Research Articles

The Role of Personal Remittances in Economic Development: A Comparative Analysis with Foreign Direct Investment in Lebanon

Understanding the role of personal remittances in economic development is crucial, particularly for countries like Lebanon, where these inflows play a significant role in economic stability. This study investigates the impact of personal remittances on Lebanon’s economic development over the period from 2002 to 2022, employing a mixed-methods approach that combines quantitative regression analyses and qualitative data from surveys. The research finds that personal remittances have a more substantial effect on Lebanon’s GDP compared to foreign direct investment (FDI), with positive correlations observed between remittances and key economic indicators such as GDP, public debt, and unemployment rates. Additionally, qualitative findings reveal that remittances are vital for addressing basic living expenses, education, and healthcare needs, illustrating their multifaceted influence on household well-being. This study contributes to the existing literature by providing a nuanced understanding of how remittances impact economic development in Lebanon and highlights the need for policy interventions aimed at enhancing financial literacy and promoting productive investments. The findings offer valuable implications for policymakers and stakeholders, suggesting that improving the management and utilization of remittances could significantly bolster Lebanon’s economic resilience and growth prospects.

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

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.

Do the Energy-Related Uncertainties Stimulate Renewable Energy Demand in Developed Economies? Fresh Evidence from the Role of Environmental Policy Stringency and Global Economic Policy Uncertainty

Despite earlier research on green energy, there is still a significant gap in understanding how energy-related uncertainties affect renewable energy consumption (REN), especially in developed nations. Thus, this study explicitly looks into how the energy-related uncertainty index (EUI) can promote (or diminish) REN in sixteen wealthy nations between 2000 and 2020. Furthermore, we attempt to specify the factors of REN and explore whether environmental policy stringency (EPS) and global economic policy uncertainty (GEPU) could help moderate (or intensify) the EUI-REN nexus. To achieve this, we employ different panel data methods. The results underscore that the EUI significantly impacts REN, denoting that higher uncertainties related to energy markets lead to promoting REN. Additionally, the (EUI × EPS) underlines that EPS has a favorable role in increasing the positive effect of the EUI on REN in sample developed countries while (EUI × GEPU) has a detrimental effect. Remarkably, the findings underline that the effect of the EUI on REN is more positive in high EPS countries and that the positive effect of the EUI is more moderate when GEPU is high. The findings also underscore that the development of the financial market, FDI, personal remittances, and EPS positively stimulate REN whereas CO2, total natural resources rents, economic activity, and GEPU have a detrimental impact. The results are robust, and authorities and policymakers are advised to implement a wide range of policy proposals to accomplish sustainable development goals (SDGs) 7 and 13.

Labor migration, remittances, and the economy in the Gulf Cooperation Council region

The massive increase in labor migration to the Middle East during the past three decades has rivaled its historical trends bound to the West. This paper assesses how this growing trend of migration may have helped shape the economic structure and performance across the member countries of the Gulf Cooperation Council. Findings from a descriptive and time series regression analysis of the limited cross-country data show that the experience with labor migration and its linkage with other aspects of the economy are varied. The migration trend coinciding with increasing personal remittances attests to the competitive demand for foreign labor. While labor migration shows mixed association with the key aspects of the economy, the stock of migrant population is negatively associated with economic growth. Albeit seemingly contradictory, the insights from this six-country analysis covering the periods since 1990 are useful to understand the complex nature of relationship between labor migration and economic structure and performance in the region.

Analysis of Income Inequality in ASEAN Countries

This study aims to analyze income inequality in ASEAN countries. The variables in this study are income inequality as the dependent variable, FDI, GDP per capita, personal remittances, and economic openness as independent variables. The scope of this research is ASEAN countries from 2009 to 2021. This research uses panel data regression method. The estimation results in this study show that FDI and GDP per capita variables significantly affect income inequality in ASEAN. Meanwhile, personal remittance and economic openness have no significant effect.

Economic Performance of Balkan Countries

The issue of analyzing the factors of the dynamics of the economic performance of each economy, which means the countries of the Balkans (Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Kosovo, North Macedonia, Montenegro, Romania, Serbia, Slovenia, Greece and Turkey), Southeastern Europe, is continuously very current, challenging, significant and complex. Adequate control of key factors can have a significant impact on the achievement of the target economic performance of each economy, including the Balkan countries. The application of multi-criteria decision-making methods enables adequate control of the key factors of the economic performance of the economies of the Balkan countries. In terms of economic performance, Serbia is in a better position than Croatia and Slovenia. Kosovo is in the worst economic position. The target economic performance of the countrymen of the Balkans can be achieved by managing inflation, and unemployment, and receiving personal remittances as effectively as possible.

Towards A Debt-Overhanged Economy: Causes and Consequences for the Economy of Pakistan

The reliance on debt is not only essential but also a key factor in economic growth of poor countries like Pakistan because of a meager tax base and an annuity of fiscal deficit. Trade surplus is a common tool that covers the budget deficit but twin deficit makes the economic conditions worst. The excessive borrowing can stimulate the economic cycle in the short run but in the in the long-run it creates the issues of debt-overhang. This timely study is an attempt to investigate the short-run and long-run dynamics of debt on the economy of Pakistan. The empirical results (ARDL co-integration) suggests that long-run relationships exist among the variables under consideration such as Exports and Remittances have negative effects on debt, while other variables have positive effects. The Error-Correction-Model (ECM) analysis indicates mean-reverting behavior, where the dependent variable returns to its long-run equilibrium. Post-estimation tests support the model's assumptions. The Jarque–Bera test shows that residuals exhibit normal distribution. CUSUM and CUSUMsq tests indicate reliability and stability of the regression model. There is a long-run relationship between exports of goods and services (EGS), imports of goods and services (IGS), gross fixed capital formation (GFCF), net official development assistance (NOD), personal remittances (PRR), and debt in Pakistan. In the long-run, Exports of goods and services have a negative impact, Imports of goods and services have a significantly positive impact, Gross fixed capital formation has a positive impact, Net official development assistance has a positive impact, Personal remittances have a negative impact on debt respectively. However, Trade as a percentage of GDP has an insignificant impact on debt in the long run. The study also found that the impact of each variable on Debt is different in the short run. Overall, the study provides valuable insights into the factors that affect Debt in Pakistan.

Economic Globalization and Human Development in Bangladesh

Economic globalization has garnered significant scholarly interest due to its potential to contribute to social stability and economic development. In recent years, there has been a growing emphasis on human development indicators in the context of Bangladesh's economic progress. This research examines the impact of economic globalization on the HDI of Bangladesh, focusing on the indicators of foreign direct investment (FDI), foreign assistance, and personal remittance inflow. Using an autoregressive distributed lag (ARDL) model and fully modified ordinary least squares (FMOLS) estimates, the research finds that not all globalizing variables have a linear effect on Bangladesh's HDI. The empirical results also suggest that the impact of economic globalization on HDI varies across the different dimensions of human development. Short-term association between foreign assistance is rather high. There is a long-term, positive correlation between FDI and foreign assistance. The research offers some policy recommendations to address the challenges of economic globalization and human development in Bangladesh. These include: Investing in education and healthcare to improve the skills and productivity of the workforce, implementing social safety nets to protect vulnerable groups from the negative effects of globalization, ensuring equitable distribution of resources to ensure that everyone benefits from the benefits of globalization, promoting inclusive growth by supporting small and medium-sized enterprises and creating jobs in the informal sector. The research concludes that a balanced approach to economic globalization is essential to maximize the benefits for human development in Bangladesh.

Moderating Role of Remittance Inflows in Testing the Validity of Ecological Footprint-Induced Environmental Kuznets Curve (EKC) Hypothesis in Nigeria: An ARDL bound testing approach

The paper tests the validity of ecological footprint induced-environmental Kuznets curve (EKC) hypothesis by considering the moderating role of remittance inflows in environmental quality -economic growth nexus in the context of Nigeria from 1980 to 2022. The study employed an ARDL bound testing approach, the results of both the short and long-run revealed that the coefficients of economic growth (GDP) and economic growth squared (GDP2) is significantly positive and negative respectively. This indicates an inverted U-shaped relationship between environmental degradations and economic growth thereby authenticating the validity of the EKC hypothesis in Nigeria. Furthermore, remittance inflows exert a negative and significant impact on environmental quality in the short-run but the coefficient is insignificant in the long-run. The interactive term of GDP and remittance inflows exert a positive and significant impact on environmental degradations in the short-run thereby revealing a complementary role by both the two variables in deteriorating the environment in the short-run, although the coefficient is insignificant in the long-run. The interactive between squared GDP and remittance inflows revealed a negative significant impact on environmental pollution thereby indicating a substitutability role by the two variables in improving the quality of the environment. Based on the findings, it is recommended that government should invests in research and development (R&D) on green energies and environmentally friendly technologies. personal remittances received should be channeled toward financing environmentally friendly businesses for environmental sustainability in Nigeria. Keywords: Ecological Footprint-Induced, Environmental Kuznets Curve, and Nigeria

Effect of Remittance Inflow on Economic Growth of Nigeria

This study examined the effect of remittance inflow on economic growth of Nigeria. The study specifically analyzed the short run and long run of personal remittance inflow on annual growth rate of gross domestic product of Nigeria. The study focused on Nigeria over the period of 41 years spanning from 1981 to 2021.This study employed secondary time series data obtained from World development Index and Central Bank of Nigeria statistical bulletin. Data collated were analyzed by correlation analysis and unit root test, co-integration test, and Error correction model estimation. Result showed that on the short run remittance inflow exert insignificant negative effect on GDP growth of Nigeria (-0.337970, p > 0.05), while on the long remittance inflow exerts significant positive effect on GDP growth rate (1.973835, p < 0.05). This study established that inflow of personal remittance on the short run might be detrimental to the level of economic growth Nigeria if not channeled to productive engagement by recipients in the home country. Meanwhile on the long run, when the inflow rises consistently, the tendency to boost the level of economic growth is Nigeria is high and significant. Hence this study recommends the need for policies and programs as well as appropriate system reforms that encourage utilization of remittance for productive purposes. In addition there is need to put in place structure that will checkmate the rate of brain drain in the country, so as not to trade our quality human capital just for funds flow that might not necessarily be channeled equitably for productive activities in the short and intermediate term.

Does Remittance Inflow and Foreign Direct Investment Spur Economic Development in Developing Countries? Insights from Nigeria

Given the rising inflows of remittance and foreign direct investment into developing countries, the study examined their importance on economic development in Nigeria using the ordinary least squares method and time series data collected from secondary sources, and the Error correction models (ECM) were estimated. Findings showed that remittances and foreign direct investment impacted positively and significantly on economic development and the exchange rate negatively influenced economic development. Thus, recommended that the government should remove strict transaction costs of remitting money to expand the overall inflow of remittances and more personal remittances should be encouraged for investment in human capital development. Additionally, improvement in the investment climate for existing and expected foreign investors, relaxation of the strict laws on profit repatriation, and the improvement in the macroeconomic environment by curbing security challenges, social unrest, and corruption will encourage foreign investors to increase their investments. It also recommends that the government take advantage of these inflows to stabilize the volatility of the exchange of the domestic currency.

The role of institutional quality on the impact of Chinese foreign direct investments and human capital development on macroeconomic performance in the CEMAC zone

This paper investigates the role of institutional quality in terms of governance on the impact of Chinese foreign direct investments and human capital development on the macroeconomic performance of the CEMAC zone between 2003 and 2020. The data were analyzed using descriptive statistics and the Correlated Panels Corrected Standard Errors (PCSEs) Approach. The findings indicated that poor governance performance in the CEMAC zone deteriorates the effects of Chinese foreign direct investments and human capital development on the macroeconomic performance of the CEMAC zone. At the same time, poor governance performance also deteriorates the impact of foreign aid and personal remittances received on the macroeconomic performance of the CEMAC zone. This study strongly recommends measures to improve institutional quality such as increased training on ethical thinking in all forms of education, meritocratic recruitment to the civil service, and auditing of public finances and services.

Foreign Financial Inflows and Economic Growth in Nigeria: A Comprehensive Analysis

Several policy measures were targeted and adapted by governments globally to achieve and rapidly increase sustainable economic growth. In view of that, economies acclimatize to both monetary and fiscal policies in order to improve economic performance. A country's economic growth is an element of intuitive impacts of changing worldwide and homegrown powers. Attracting foreign financial inflows is one major policy strategy that the government has used, particularly in developing and emerging economies, to accelerate economic growth. This concentrate hence notices the Effect of Unfamiliar Economic Inflows, dominatingly, the degree to which Foreign Direct Investment, Foreign Portfolio Investment, Foreign Public Debts and Foreign Personal Remittances broadly control financial growth in Nigeria from 2000- 2021. The review utilized the Autoregressive Distributed Lag (ARDL) model to assess the information acquired. Discoveries uncovered that Foreign Direct Investment inflow altogether influences economic growth in Nigeria, and there is no huge long run connection between Foreign Portfolio Investment and financial growth in Nigeria. Besides, it was found that long run negative relationship exists among Settlement and Outer Public Obligation and economic growth in Nigeria. Last but not least, the study suggests that economic managers devise measures that will make it easier to mobilize more domestic investment to lessen the uncertainty that may accompany foreign investment during periods of local or international economic crises. In a similar vein, when making decisions that have an impact on the expansion of the economy, policymakers must take into account the potential benefits as well as the potential dangers associated with remittances.

Investigation of Causal Linkages Between Financial Development and Economic Growth: Evidence from Pakistan

Financial development is a driving factor for economic growth and is important in fostering growth. An efficient and effective financial system contributes to economic growth and fosters the performance of other economic measures. This study aims to investigate the influence of financial innovation on economic expansion to understand the correspondence between financial development and economic growth in Pakistan. Augmented Dickey-Fuller (ADF) and Phillips Perron (PP) are used for stationarity. Auto Regressive Distributed Lag (ARDL) and Error Correction Model are employed to analyze the correlation between economic growth and financial development. The finding shows that financial development stimulates economic growth. The research explains that foreign direct investment and personal remittances adversely affect GDP growth. These understandings recommend that although financial development generally promotes, its results can vary extensively and depend on specific context-dependent conditions. Furthermore, applying CUSUM AND CUSUM of square tests to measure model stability convincingly confirms a long-term relation between financial development and economic expansion, disproving the null hypothesis of no co-integration and reinforcing that financial development is essential to domestic economies. Policymakers need to practice these understandings in actionable plans by highlighting financial innovations that advance access to credit and efficiently allocate resources so investment in education and agriculture can maximize economic growth.

Human Development Indices and Governance Interrelationship: Evidence from Nepal

The objective of this study is to investigate the correlation between human development indices (life expectancy, education and GNI) and six dimensions of governance (e.g., voice and accountability, political stability and no violence, government effectiveness, regulatory quality, rule of law, and control of corruption), while utilizing remittances as a control variable in the analysis. The analysis conducted using the ordinary least squares (OLS) method has revealed that personal remittances have a substantial influence on human development indices. A population that has received a high level of education tends to possess a greater understanding of their rights and is able to actively engage in the process of governance. The establishment of good governance has the potential to facilitate the development and successful execution of effective educational policies. A positive correlation has been identified between human development indices and two aspects of governance, including government efficiency and political stability. Life expectancy index has also associated with regulatory quality of government.

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.

Well-being effect of international migration and remittance on human and gender development in South Asian countries.

This study investigates the well-being effect of international migration and remittance on human and gender development in selected South Asian countries. The study has adopted panel regression analysis using secondary data from the World Development Indicators and United Nations Development Programme. This database contains information on seven South Asian countries from 1995 to 2020. The study simultaneously applied the Levin-Lin-Chu, Breitung and IM-Pesaran unit root tests to check the stationarity of data. After satisfying the condition, econometric models such as Fixed and Random Effects were executed. Pesaran's test of cross-sectional independence, the Westerlund test for cointegration and VIF tests were performed in order to check the robustness of the results. As a post-diagnostic tool, the Hausman test suggests that the Fixed Effect models are appropriate for each estimation. The results demonstrate that personal remittance positively and significantly affects human and gender development. Similarly, international migration significantly influences human development while negatively affecting gender development. The study suggests that these countries should prioritize attaining higher remittances by sending more international migrants. Similarly, the provision of cheaper formal channels for remitting money and giving incentives can be effective for higher remittance inflow. Moreover, negotiation at the government-to-government level can effectively expand the international labour market of the selected countries.

Did the Economic Reforms Change the Macroeconomic Drivers of the Indian Economy in the Post-Reform Era? An ARDL Bounds Test Approach

Purpose: The purpose of this study is to investigate the macroeconomic forces that have been driving the Indian economy during both the pre-reform and post-reform eras, that is, from 1950-1951 to 1990-1991 and from 1991-1992 to 2022-2023 respectively. 
 Problem: The Indian economy underwent significant economic and financial sector reforms in 1991-92, with the goal of reviving its stagnant growth. These reforms are intended to spur the economic growth of India. What were the main forces behind the Indian economy before and after the reforms? Is the research question. The goal of the current study is to determine if the economic reforms shifted or maintained the pre-reform era’s driving forces for the Indian economy in the post-reform era. 
 Design/Methodology/Approach: The gross domestic product (GDP), the gross domestic savings (GDS), the private consumption expenditure (PFCE), the government final consumption expenditure (GFCE), the inflation rate, the exchange rate, the exports, the imports, the internal and external borrowings of the government, personal remittances, foreign direct investment (FDI), and foreign portfolio investments (FPI) are all taken into consideration in order to fill the research gap that has been identified as a result of the comprehensive review of the literature. Following an analysis of the selected variables' fundamental characteristics, an econometric model is developed using the Autoregressive Distributed Lag (ARDL) Bounds Test Model. 
 Findings: There is no evidence of long-run causation and association between the variables, but the findings of the ARDL Bounds Test showed that in the pre-reform period, PFCE is the major driver of the GDP in the short-run, with strong support from imports. However, since the reform, PFCE, GDS, and Exports are the primary short- and long-term contributors to GDP. 
 Practical Implication: These findings indicate that India's macroeconomic system is shifting. The Indian economy has undergone a dramatic shift, moving away from a reliance on imports and toward one that is consumer-driven and export-driven. As savings and consumer expenditures are the main drivers of the Indian economy’s growth in the post-reform era, policies should be designed to increase savings and consumption as well as increase exports.

Foreign Direct Investment, Gross Capital Formation, Foreign Remittances, and Economic Growth in Zimbabwe

Abstract Research background Capital investment financing has been cited as a critical element in economic growth the world over although there is no consensus regarding the significance, direction, and magnitude of the relationship. Purpose The article investigated the relationship between foreign direct investment, gross capital formation, personal remittances, and gross domestic product in Zimbabwe from 1960–2020. Research methodology The random effects model was used to examine this relationship using data collected from the World Development Indicators database. The random effects model was selected after performing the Hausman test. Results All the regression coefficients of the country’s gross domestic product reveal a direct or positive relationship with the three independent variables. Furthermore, the study reveals that gross capital formation had the highest contribution to Zimbabwe’s gross domestic product compared to that of foreign direct investment and personal remittances for the period under study. The coefficients of determination of the independent variables were significant. In other words, foreign direct investment accounted for 57.24%, gross capital formation 68.47%, and personal remittances 48.76% to foreign direct investment for the same period. Novelty The article closed the gap in knowledge by drawing attention to the relationship between foreign direct investment, gross capital formation, personal remittances, and gross domestic product in Zimbabwe.

Nexus between Personal Remittances, Financial Deepening, Urbanization, and Renewable Energy Consumption in Selected Southeast Asian Countries: Evidence from Linear and Nonlinear Assessment

This study examines the correlation between personal remittances, financial development, urbanization, and renewable energy utilization in Southeast Asian countries for the period 1991-2020. The study employs both linear and nonlinear analyses to examine the symmetric and asymmetric effects of these variables on renewable energy consumption. The results offer a plethora of significant insights. To commence, it is noteworthy that there exists an adverse correlation between financial deepening and the utilization of renewable energy, thereby challenging the prevailing notion that these two factors are positively interconnected. This demonstrates that the increasing financial growth in South Asian countries could potentially have adverse effects on the environment and hinder the implementation of renewable energy solutions. Furthermore, previous studies have demonstrated a positive correlation between urbanization and the utilization of renewable energy sources. The utilization of renewable energy technology is encouraged in cities due to factors such as population density, resource availability, and supportive legislation. Thirdly, personal remittances exhibit a varied impact, yielding favorable long-term consequences in Bangladesh and Pakistan, while conversely resulting in negative long-term effects in India and Sri Lanka. The findings indicate the necessity for governmental interventions aimed at mitigating the adverse effects of remittances, while simultaneously optimizing their positive influence on the utilization of renewable energy. Trade openness is positively correlated with long-term utilization of renewable energy, suggesting the potential for international trade in renewable energy resources. Nevertheless, it is worth noting that there is a negative correlation between trade liberalization and the utilization of renewable energy in the short term. This highlights the importance of implementing additional policy measures to address this issue. This study contributes to our comprehension of the intricate connections among personal remittances, financial deepening, urbanization, and energy consumption in Southeast Asian nations. It offers valuable insights for policymakers, researchers, and practitioners involved in advancing sustainable energy transitions and environmental sustainability.