Effect Of Remittances Research Articles

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.

Can Remittance Promote Tourism Income and Inclusive Gender Employment? Function of Migration in the South African Economy

With globalisation and international trade, remittances and migration significantly influence economic activities, yet their impact on tourism income and gender-specific employment remains under-researched. This study uses autoregressive distributed lags and Granger causality to examine the effects of remittances and migration on tourism income and employment in South Africa. Three models are established as follows: for aggregate employment, male employment, and female employment, each with equations for tourism income and employment. Key findings from this study indicate that remittances significantly drive tourism income in both the short and long run across all models. Conversely, employment negatively impacts tourism income, hinting at sectoral trade-offs. Migration positively affects tourism income in the short run for male and aggregate models but is insignificant for female employment. Remittances boost male employment in both the short and long run, whereas their impact on female employment is significant only in the long run. Causality analysis shows a bidirectional relationship among employment indicators, with unidirectional causality from remittances to migration and from migration to income. This study recommends policies to support remittance inflows and their productive use in tourism, along with targeted interventions to reduce gender disparities in employment and promote equitable economic opportunities.

Do Remittances and Financial Development Promote International Reserves in BRICS Economies?

The international reserves reflect the economy’s strength by honoring its financial liabilities. Hence, this paper analyzed the effect of remittances and financial development on international reserves in Brazil, Russia, India, China, and South Africa (BRICS) economies from 1960 to 2022. By employing econometric analysis, the paper reveals a significant and positive influence of remittances and financial development on international reserves. In addition, we reveal a positive and significant association between remittances and financial development and international reserves in the long run. Further, a short-run relationship exists between financial development and international reserves.

Effect of Remittances on Healthcare of Left-Behind Parents

This study investigates the impact of remittances on the health status of parents left behind in their communities by their children. While the existing literature explores the effects of remittances through health expenditure, this study contributes to the literature by analysing the causal effects of remittances on the level of access to healthcare services and health outcomes. Using three waves of the Bangladesh Integrated Household Survey coupled with a fixed-effects instrumental variable approach, we find that demand for healthcare declines with rising remittances and that remittances decrease acute illness, hinting that remittances may improve preventative health measures. Finally, the findings suggest to policymakers the importance of greater investments in the public health system to make it accessible for all, especially for non-remittance-receiving households.

Analyzing the impact of remittance, FDI and inflation rate on GDP: A comparative study of Bangladesh, Pakistan and Sri-Lanka using VAR and BEKK-GARCH approach

This study examines the impact, conditional correlation and volatility spillover effect of remittances, foreign direct investment and inflation rate on GDP in Bangladesh, Pakistan, and Sri-Lanka, three Asian nations that are particularly vulnerable. While numerous studies have examined the relationship between remittances, FDI and IR on GDP but this paper approaches advanced econometric techniques to capture spillover effect and the dynamic interactions between the variables. For estimation purposes the study employs different econometric techniques such as Augmented Dickey-Fuller (ADF) test, VAR model, Granger causality tests, Impulse Response function, Variance Decomposition and BEKK-GARCH model. Bangladesh and Sri Lanka's REM, FDI and IR have no significant effects on GDP according to the VAR model. BEKK-GARCH demonstrates that three countries have both unidirectional and bidirectional transmissions of volatility, with the exception of Pakistan's REM and Bangladesh's FDI. We find that VAR model may not be adequate in capturing the complex dynamics between variables, which can be better captured by BEKK-GARCH model. Our comparison research shows how these variables affect GDP differently and similarly in each of the three nations, giving policymakers information they can use to create customized policies that encourage economic growth.

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.

Role of Remittance on Sustainable Economic Development in Developing and Emerging Economies: New Insights from Panel Cross-Sectional Augmented Autoregressive Distributed Lag Approach

In this study, we aim to investigate the effects of remittance on sustainable economic development in 52 developing and emerging economies from 1996 to 2021. The study uses other variables such as real GDP per capita, total natural resource rents, globalization, and foreign direct investment. To achieve the mentioned objective, we apply a series of second-generation panel estimation approaches. These include CIPS unit root, Westerlund cointegration, cross-sectional augmented autoregressive distributed lag (CS-ARDL), and robustness using augmented mean group (AMG) and common correlated mean group (CCEMG). These methods are useful provided they are robust towards cross-country dependencies, slope heterogeneity, endogeneity, and serial correlation, which are disregarded in the conventional panel estimations. The empirical findings indicate that remittance accelerates sustainable economic development. Additionally, real GDP per capita and globalization also positively contribute towards sustainable economic development. However, total resource rents deteriorate sustainable economic development. This study offers key policy implications based on the empirical findings for the developing and emerging economies.

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.

The effect of remittances on the Indian economy

The effect of remittances on the Indian economy

DO REMITANCES REDUCE POVERTY IN INDONESIA? AUTOREGRESSIVE DISTRIBUTION LAG APPROACH

One of the problems often faced in achieving community welfare is poverty. This study aims to analyze the effect of Remittances, Gross Domestic Product (GDP), Unemployment Rate, and Economic Crisis on poverty in Indonesia 1990-2022. The analysis method used is explanatory research with a quantitative approach regression analysis method using the Autoregressive Distribution Lag (ARDL) estimation tool. The data used is secondary data in the form of time series data from 1990 to 2022. Based on the conditional Error Correction Model (ECM) test, Remittances have a negative but insignificant influence in the long run and short run. Gross Domestic Product (GDP) has a negative and significant influence in the short run. However, in the long run GDP has a negative and insignificant influence. The unemployment rate has a positive and significant influence in the long run. However, in the short term the unemployment rate has a negative and insignificant effect. Economic crisis has a positive and significant effect in the long term. However, in the short term the economic crisis has no effect on poverty in Indonesia.

The Effect of Food and Financial Remittances on Household Food Security in Northern Nigeria

Remittances from migrants are an important livelihood strategy to mitigate the impact of adverse economic conditions, particularly in developing countries and rural areas. This study examines how migration and remittances affect household food security by analyzing data collected from 180 farmers in northern Nigeria in 2018. The descriptive results show that households use remittances mainly for health care and education. Remittances are most commonly provided in the form of finances and food. Binary logit regression results show that food remittances have a significant positive impact on food security status. Financial remittances did not have a statistically significant impact on food security. As the number of migrants in a household increases, the probability that the household is food secure decreases. The propensity scores matching result also showed that migrant households receiving food remittances were more food secure. In light of these findings, we emphasized the need to include both financial and food remittances in studies to understand the effect on food security.

Remittances, Debt Service Payments and Economic Growth in Nigeria

The study investigates the intricate relationship between the effects of remittances (REMIT) and debt service payments (DSP) on economic growth (RGDP) as well as other key variables, external reserve (ER), foreign direct investment (FDI), and external debt (EXTD) on economic growth (RGDP) in Nigeria from 1995 to 2021. Various statistical techniques, such as Ordinary Least Square (OLS), Augmented Dickey Fuller (ADF) tests and ARDL, were used. The result indicates the existence of a positive correlation between RGDP and FDI; DSP and ER exhibit a moderate negative correlation, while REMIT and DSP show a strong negative correlation. ER and REMIT indicate a correlation, while EXTD and ER indicate a negative correlation. All variables are I(1) and the ARDL Bound test for co-integration indicates that a long-run relationship exists between dependent and independent variables. ARDL estimation shows that only the coefficient of external debt is significant. The R2 shows that 84% of the variation in RGDP is explained by the independent variables. The test for autocorrelation (DW = 2.33) indicates no autocorrelation in the error term.
 This study recommends that policymakers should implement measures to attract and retain foreign investments, given the positive impact of FDI on RGDP, and Policymakers should explore strategies to channel remittances into productive sectors, such as investments in infrastructure, education, and small-scale enterprises.

INTERACTIVE EFFECT OF MIGRANT REMITTANCES AND FINANCIAL MARKET DEVELOPMENT ON GROWTH IN SUB-SAHARAN AFRICA

Purpose: The aim of this study is to examine the interactive effect of migrant remittances and financial market development on growth in Sub-Saharan Africa (SSA). Design/Methodology/Approach: The study uses the dynamic heterogeneous panel data approach-the pool mean group (PMG) technique in analyzing data obtained from twenty-seven countries covering the period 2000- 2020. Findings: The study findings reveal that the interactive effect of migrant remittances and financial market development on growth in the region is positive and significant, implying a complementarity relationship. Originality: The value of the study is represented by the measurement of key variables like financial market development (i.e. equity market development and banking sector development). Also, investigating whether the interactive effect of migrant remittances and financial market development on growth in Sub-Saharan Africa (SSA) is complementarity or substitutes is of importance to guide policymakers in the region.

How Do Remittances Influence the Mitigation of Energy Poverty in Latin America? An Empirical Analysis Using a Panel Data Approach

Energy poverty represents a critical challenge in Latin America today, given the social disparities the region faces. In this context, this study focuses on exploring the effects of remittances on the energy poverty of 13 Latin American countries during the period 2000–2020. Panel estimations with fixed and random effects, along with the generalized method of moments, are employed to address potential endogeneity issues. The results suggest that remittances play a significant role in mitigating energy poverty in the Latin American region, particularly in rural areas. Furthermore, it is observed that economic growth and financial development act as mediators, allowing remittances to indirectly contribute to mitigating energy poverty. Although inequality was examined as a potential mediator, the findings suggest that it does not play a significant role in this context. It is concluded that remittances are an appropriate mechanism to improve the quality of life of the population, and their impact is strengthened in a more robust economic environment.

Effect of Remittance on Rural Livelihood Among the Household Members of the Annapurna Rural Municipality, Kaski

Effect of Remittance on Rural Livelihood Among the Household Members of the Annapurna Rural Municipality, Kaski

The interaction between remittance, FDI, renewable energy, and environmental quality: a panel data analysis for the top remittance-receiving countries.

A country's financing system is essential in addressing sustainable development requirements. National sources and international financial flows contribute to economic growth and environmental quality in many ways, and their impact can be critical. This paper applied panel data analysis using a comparative approach of Pooled Mean Group Auto Regressive Distribute Lags (PMG-ARDL) and Cross Sectionally ARDL (CS-ARDL) to estimate the effects of FDI, renewable energy, and remittance on environmental quality in the top remittance-receiving countries, during 2000-2021. The study emphasized the positive relationship between FDI and carbon emissions. Moreover, renewable energy and remittances revealed an inverted U-shaped relationship with carbon emissions. In the case of developing countries from the panel, remittance improves environmental quality after reaching the threshold. Moreover, for some of the developing countries included in the panel, we found that they do not achieve the desired carbon mitigation effect in their early stages of renewable energy implementation. However, renewable energy becomes a key factor for tackling environmental pollution after a certain threshold. The mixed results determined diverse policy recommendations for various stakeholders.

Impact of remittances on domestic investment in West African countries: the mediating role of financial development

Several studies have analyzed the effect of remittances and financial development on growth or investment with little attention on their interactive effect. This study examines the relationship between remittances, financial development and domestic investment under different levels of financial development in a panel of 10 Sub-Saharan African countries. The research uses data covering the period 1975–2019 and employs panel Pooled Mean Group estimator. The results reveal that both remittances and financial development have positive effects on domestic investment. The positive interactive effect lends credence to that remittances and financial development act as complements in enhancing domestic investment. This suggests that financial sector is a strong transmission channel through which remittances positively affect investment in West African countries. The results further reveal that there exists a threshold effect of financial development in the remittances and investment nexus. More precisely, beyond a threshold of domestic credit to the private sector of about 21% of GDP, there is a positive and significant relationship between remittances and investment rate, while this relationship is negative under the threshold. It is, therefore, recommended that West African countries should adopt appropriate policies to increase their financial sector and lower transaction costs so that gains from remittances can effectively be channeled into investment and growth. In sum, issue of the mediating role of financial development needs to be taken into consideration in the examination of the nexus between remittances and investment.

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.

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.

Impacts of Remittance and FDI on Economic Growth in South Asian Countries: A Panel Data Analysis

The current study looks at the short- and long-term effects of foreign direct investment (FDI) and remittances on gross domestic product (GDP) in South Asian nations, particularly Bangladesh, India, Sri Lanka, and Pakistan. Utilizing annual panel data from several secondary sources spanning the period from 1981 to 2023, the research applies multiple econometric techniques, including LLC and IPS tests, Johansen Fisher type cointegration test, and panel Vector Error Correction Model (VECM), along with several diagnostic tests to ensure model reliability. The findings reveal a substantial long-term relation between the variables. Remittances and total reserves have a notable optimistic impact on GDP in both the long and short term, while FDI negatively impacts GDP. To enhance remittance flow and promote sustainable economic growth, the study suggests exporting a skilled labor force abroad. Consequently, the study recommends that South Asian countries develop policies, programs, and institutional reforms to encourage the productive use of remittances.