Effect Of Remittances Research Articles

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 governance indicators have a role in remittances-growth nexus in Egypt?

Purpose ― Drawing on annual data from 1996 to 2022, this study aims to examine the effect of Egypt’s real GDP growth. Methods ― Autoregressive Distributed Lag (ARDL) and Cointegration technique are applied by first examining the stationarity of the series by utilizing the Augmented-Dicky-Fuller (ADF) unit root test. The bound cointegration test is then implemented to evaluate the existence of cointegration among the variables. Findings ― The results indicate that the GDP growth rate has a long-run positive relationship with remittance inflows in Egypt. This paper also finds that the average governance indicators in Egypt, which include government effectiveness, political stability, control of corruption and regulatory quality, voice and accountability, and the rule of law, could help facilitate the long-run effect of remittances on GDP growth. Implication ― The findings imply that maintaining high levels of governance indicators is essential for helping Egypt benefit from remittances and enhancing its economic growth.Originality/value ― The study is a pioneer in including the average governance indicators in the remittance-growth nexus study for Egypt. Its purpose is to assess whether governance quality affects the nexus and whether there exists a threshold for the average governance indicators below which the flow of remittances does not encourage economic growth.

Asymmetric effects of remittances on output in expansions and recessions

Using non-linear methods, we argue that current research on estimates of remittance multipliers in expansions and recessions may yield biased results by ignoring whether remittances are increasing or decreasing. We employ an extended non-linear ARDL model to decompose remittance data into positive and negative shocks during expansions and recessions with data from the top eight remittance-receiving developing countries. We find that a decline in remittances will reduce output in expansions. Second, an increase in remittances will increase output during recessions. Positive remittance shocks are not associated with output in expansions, nor generally are negative remittance shocks in recessions. The managerial implications are twofold. First, policymakers can use remittances to counteract recessions in the receiving country by implementing favorable remittance policies, such as reducing transfer fees. Second, if remittances are maintained in expansions, future recessions can potentially be managed.

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.

International migration in the context of financial and economic security: The role of public administration in the development of national economy, education, and human capital

The article outlines trends in today global migration and its consequences for economic growth and security. Both positive and negative sides of ongoing processes are analyzed, in particular the effect of remittances on the one side and money laundering and terrorism financing due to activities of criminal organizations involved in migrant smuggling on the other side. Accordingly, challenges and goals for national public administrations are indicted.

Exploring the Moderating Effect of Institutional Quality on the Nexus between Remittances and Financial Development: A Comprehensive Analysis

Purpose –The purpose of this paper is to analyse the moderating effect of institutional quality on the relation between remittances and financial development in low-income economies. The long-term and short-term effects of remittances on financial development have been investigated.Design/methodology/approach –World Bank country classification is considered to categorize low-income countries. These nations are characterized as having Gross National Income (GNI) per capita falling under the threshold of $1,085. 17 countries are included in the dataset spanning the years 2002 to 2022. Panel Autoregressive Distributed Lag Pooled Mean Group (ARDL-PMG) approach is used in this study. Using the PMG approach allows for distinct analysis of long-term and short-term dynamics. Findings –According to the findings obtained from the PMG estimator, institutional quality serves as a moderating factor in the nexus between remittances and long-term financial development. These findings indicate that in nations with robust institutional frameworks, remittances are channelled more effectively and promptly towards bolstering financial development, in contrast to regions with weaker institutional structures. Furthermore, it is noted that institutional quality demonstrates a positive correlation with long-term financial development. However, these conclusions do not hold in the short term. Discussion –The results of this study align with the findings reported in the previous literature. By using the ARDL-PMG model and by considering low-income countries, an important contribution is made to the financial development literature.

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.

Remittance and carbon dioxide emissions in the Southern African Customs Union region: Is there a modified environmental Kuznets curve?

The remittance-carbon dioxide (CO2) emissions nexus remains a hotly debated topic in the literature, with the majority of studies offering mixed conclusions. This study attempts to reconcile these disparities by investigating the nonlinear effect of remittances on the CO2 emissions in top-remittance receiving countries in Southern African Customs Union (SACU) region, using the modified Environmental Kuznets Curve framework which focuses on the effect that remittances might have on CO2emissions. The Cross-Sectional Autoregressive Distributed Lag (CS-ADRL) approach is applied to these top-remittance receiving countries from 1990 to 2020, representing a pioneering investigation for these countries. The finding of this study reveal that both the estimated coefficient of remittances and its quadratic term are statistically significant, with remittances displaying a positive coefficient and the quadratic term exhibiting a negative coefficient. This pattern confirms the presence of a modified EKC hypothesis, meaning as remittances increases, CO2 levels displays an unambiguous inverted U-shaped trajectory.

Unveiling the impact of remittances on productive efficiencies: investigating productivity growth of prominent remittance-receiving developing nations

PurposeThe present study reviews the theoretical and empirical literature about the significance of international migrants' remittance to empirically analyse the effect of remittance on the productivity growth of developing countries using a panel dataset from 1991 to 2021.Design/methodology/approachThe study utilised the data envelopment analysis (DEA)-based Malmquist Productivity Index (MPI) to measure nationwide production efficiencies. It first performed a unit root test, cointegration test and pool mean group autoregressive distributed lag (PMG-ARDL) technique. To assess the robustness of the findings, the study also uses dynamic ordinary least squares (DOLS) and fully modified OLS (FMOLS) estimators.FindingsThe results demonstrated that remittances are a significant source of funding that promotes innovation [i.e. technological progress (TEC)] and hastens the country's total factor productivity (TFP) growth. However, the study needed to have established the effect of inward remittances on the nation's technical efficiency (EFF).Research limitations/implicationsAs remittances encourage innovation and TFP growth (TFPG), the concerned governments must create favourable and enabling economic environments to increase remittance inflows, which will have far-reaching growth repercussions.Originality/valueThe present study emphasises the connection between remittances and productivity growth, the disintegration of TFP, advanced econometric techniques and contribution to research policy. Despite prior literature exploring the effect of remittances on economic growth, a dearth of literature exists on how remittances affect a country's productivity. The output-based MPI methodology used in this study offered a nuanced understanding of how remittances affect many facets of productivity growth in developing nations.

Fertility, economic development, and remittances in post-communist times

ABSTRACT This study investigates fertility responses to remittances across developed and developing countries in post-communist times. We first collected fertility, remittances, and income statistics over the 1995–2020 period and created a new vulnerability index that identifies less economically developed states with high fertility rates and dependent on remittances. We then examined the global fertility effects of remittances between 1995 and 2015 via Ordinary Least Squares, Fixed Effects, and Instrumental Variable estimation methods. The baseline regression results suggest that the relationship between remittances and fertility rates of remittances-receiving countries is generally inverse. We also found that the fertility-reducing power of remittances is heterogeneous worldwide. To illustrate the findings, we constructed two heat maps for 196 countries. The first one depicts the distribution of the vulnerability index, and the second one is dedicated to variations in the fertility effects of remittances across countries based on the vulnerability index.

Globalization, Migration, and Economic Growth in Nigeria

The study aimed to empirically examine the effect of globalization and migration on Nigeria's economic growth. The study covered the period 33 years (1990 – 2022). The variables used in the study are foreign direct investment, trade openness, foreign exchange rate, remittances, and gross domestic product. The ARDL (autoregressive distributed lag) model was employed for the study and a long-run relationship was established. Findings revealed that remittance had a significantly positive effect on Nigeria's economic growth in the long run. The finding of the error correction mechanism revealed a speed of adjustment to equilibrium of 31.1%. The study suggested that the government, as a key player, should take immediate action to formulate policies that bolster and optimize the advantages of remittance inflows. This is crucial as remittances have been found to positively and significantly affect economic growth in the short and long run. These measures may encompass reducing transaction expenses, improving financial literacy among recipients, and encouraging investments to amplify the developmental effects of remittances.

How Do Net Exports and Remittances Impact on Economic Growth in Bangladesh? Insight from ARDL Time Series Model

This study delves into the intricate contribution of net exports and remittances on economic growth of Bangladesh with a focus of their impact on Gross Domestic Product (GDP). Net exports along with remittances are considered as key independent variables influencing the economic landscape of the country. The long-run and short-run effects of net exports and remittances on GDP are analyzed by conducting the Autoregressive Distributed Lag (ARDL) model over time period 1980-1922. The results of this study show that there is a positive effect of net export, remittance and gross capital formation on economic growth. On the other hand, all these independent variables have negative impact in short run and will adjust in long run significantly. As Bangladesh is a large remittance receiving country, export also increases in large volume by gross capital formation which increases domestic investment and output. The effects of remittances on GDP growth and exports on economic growth have each been the subject of much research, but independently. Buckling the payoff of exports and remittances on economic growth has not been studied. To fill this inane, we have tried to show how remittances and exports together boost economic growth. The findings contribute to a deeper understanding of the mechanisms through which net exports and remittance inflows shape economic outcomes in Bangladesh, offering insightful information to stakeholders and policymakers who are active in promoting sustainable economic development.

The effect of remittances on poverty and economic growth in Jordan: evidence from augmented autoregressive distributed lag model

This study investigates the effects of remittances on poverty and economic growth in Jordan from 1970 to 2022. The study makes use of the augmented autoregressive distrib­uted lag (AARDL) cointegration method to investigate the relationships between remittances, poverty, and economic growth. The study also incorporates control variables including for­eign direct investment, inflation, interest rates, government expenditures, and the composite trade index to take into consideration their potential impact on the outcomes. The findings support remittances’ role as an economic development accelerator by demonstrating their strong positive impact on Jordan’s economic growth. Remittances have a detrimental im­pact on poverty as well, suggesting a potential role for them in efforts to eradicate it. The research also confirms the anticipated impacts of the control variables, indicating that while inflation, interest rates, and the composite trade index have favourable effects on poverty, government expenditures and foreign direct investment have negative consequences. The policymakers and stakeholders in Jordan will need to consider the implications of these findings carefully. Policymakers can create measures to draw in and successfully channel remittance flows by recognising the beneficial effects of remittances on economic growth and poverty alleviation. The findings also highlight how important it is to encourage foreign direct investment, control inflation and interest rates, and facilitate trade diversification in order to boost economic growth and lower poverty.

Effect of International Trade on the Economic Growth of Nepal

The study explores the relationship between exports, imports, remittance, and economic growth of Nepal for the 1974/75 to 2021/22 fiscal year. Descriptive and analytical research designs were employed on time series data obtained from secondary sources. The Augmented Dickey-Fuller unit root test, co-integration technique, and Error Correction Model (ECM) were employed for empirical investigation. The impact of exports, imports, and remittances on economic growth was analyzed through the ordinary least square regression method for the long run relationship. The result reveals the existence of a long-run relationship between imports, remittances, and gross domestic product. The effect of exports and imports was statistically significant on the economic growth of Nepal and the effects of remittance was statistically insignificant on economic growth. The result emphasizes that the Government should ensure the export promotion policies to achieve Nepal's high and sustainable economic growth by investing in trade infrastructure and export subsidies and creating a favorable environment that encourages using remittance money to support productive sectors of the economy.

Impact of Male Migration on the Empowerment of Left-behind Muslim Women in Malappuram, Kerala

Migration has been projected as a force capable of developing economies of the labour exporting nations. In the past, religious orthodoxy among the Muslims in Malabar especially in the Malappuram district prevented women from obtaining higher education and finding employment which restricted their freedom and well-being. However, there have been changes in women's perspectives in reaction to changing needs and situations, for which migration and remittances made by migrants abroad have been the important contributing factors. When the male migrates, the left-behind women have to assume increased responsibilities which increases their control over household resources, mobility and decision-making power and the foreign remittances are utilised by the left-behind women to improve their quality of living, education and information. This article explores the effects of male migration and foreign remittances on the left-behind Muslim women in the Malappuram district through the lens of the Capability approach by constructing the Women’s Capability Index based on a sample survey in the Malappuram district using a Stratified Multi-stage random Sampling method. The study identifies a set of capabilities that are appropriate to the context of male migration and the consequent effect on the left behind women’s living arrangement, provides a framework for efficiently evaluating these capabilities, aggregates the capabilities into a single index, and then validates and tests the index. The Ordinal Logistic Regression, used to analyse the role of migration in the capability expansion of left-behind Muslim women shows that the foreign remittances sent by the husbands from abroad have a positive statistically significant effect on the left-behind Muslim women in the study area, implying that with the increase in the foreign remittances received by the left behind women, their capability also increases, whereas the husband's migrant duration does not have a statistically significant effect on the left-behind Muslim women’s capability

Achieving the sustainable development goals in developing countries: The role of remittances and the mediating effect of financial inclusion

This study investigates the pivotal role of remittances in advancing Sustainable Development Goals (SDGs) within developing countries. While previous literature has acknowledged the potential of remittances in fostering growth, empirical analyses on their impact on SDGs remain scant. Utilizing data from 109 developing countries spanning 2000 to 2022 and employing system GMM and the Lewbel's (2012) estimator to tackle endogeneity issues, we unveil significant positive effects of remittances on SDGs. Additionally, we identify financial inclusion as a mediating factor enhancing remittances' impacts on SDGs. Moreover, we show that remittances, international aid, and government spending exhibit complementary roles in SDGs attainment.

Theorising the effects of EU emigration for origin countries: win-win, dependency or agency?

ABSTRACT Theory on East-West migration and EU freedom of movement reveals a bias towards accounts from neoclassical economics predicting a win-win for destination and origin countries of migrants. To counter the bias, we juxtapose the neoclassical perspective with the dependency school and the state capacity literature. Empirically, we find that benefits of migration occur regarding the effects of remittances yet not for expectations on return and demography as well as GDP development and growth. The two alternative accounts explain better how emigration may aggravate a country's peripheral position in the EU or how countries manage to reverse and limit outmigration.

The Effect of Remittances on Economic Expansion and Poverty Reduction: Evidence from Pakistan

This study investigates the impact of remittances on economic growth and poverty reduction in Pakistan. The research aims to empirically examine the relationship between remittances, economic expansion and poverty reduction. Using data from 1980 to 2021, sourced from the World Bank, the study employs the Augmented Dickey-Fuller test to assess the stationarity of variables. The results indicate that all variables are stationary, using the Autoregressive Distributed Lag (ARDL) approach for analysis. The ARDL bound test confirms a long-term relationship between the variables. In the context of economic growth, the study finds that remittances have a positive and significant impact, with a 1% increase in remittances associated with a 0.26% rise in GDP. However, the study observes a negative impact of foreign direct investment on GDP. Regarding poverty reduction, the results suggest that remittances have a negative and insignificant effect on poverty, with a 1% increase associated with a 0.53% decrease in poverty. Granger causality tests reveal unidirectional causation between remittances and economic growth and between remittances and poverty. The findings underscore the importance of remittances in influencing economic growth and poverty reduction in Pakistan. Recommendations include policies to enhance remittances' positive impact on economic growth and poverty alleviation. The study's implications extend to policy recommendations, emphasizing the potential benefits of remittances in fostering economic growth and poverty reduction. Policymakers are encouraged to consider remittances' positive impact when formulating sustainable development strategies. Additionally, the research contributes to the existing literature by providing insights into the nuanced relationships among remittances, economic growth, and poverty alleviation in Pakistan.

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.

Do remittances increase tax revenues in developing countries? Evidence from the threshold regression models

ABSTRACT This paper provides original econometric evidence on the effect of remittances on tax revenues in developing countries. In applying the system generalized methods of moments (SGMM) and the panel threshold regression method to a sample of 83 developing countries over the period 1990–2019, we find two major results. First, remittances positively and significantly affect tax revenues in developing countries. Second, as far as the nonlinear relationship is concerned, we find two extreme regimes with a smooth shift characterizing the remittances-tax revenue nexus, with respect to conditional variables; remittance effects are positive and significant under the first regime and negative and significant under the second. Furthermore, our findings show that the nonlinear relationship between remittances and tax revenues depends on the levels of informal economy, corruption, and growth volatility.