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1 – 10 of over 2000
Article
Publication date: 13 April 2010

Ihab Khaled Magableh, Abdel Baset Athamneh and Maher Almahrouq

The purpose of this paper is to examine the impact of inbound and outbound labor migration on the Jordanian economy.

1742

Abstract

Purpose

The purpose of this paper is to examine the impact of inbound and outbound labor migration on the Jordanian economy.

Design/methodology/approach

Using a qualitative analysis subsidized by two econometric models, foreign labor and their remittances and the Jordanian labor abroad and their remittances are examined for their impact on main macroeconomic indicators.

Findings

The characteristics of foreign labor and the Jordanian labor abroad, in terms of skills and qualifications are completely different. Productivity of a local worker is found to be higher than of a foreign worker. Thus, replacement of foreign labor is highly recommended but difficult due to “shame culture”. Foreign labor deepens unemployment and negatively affects economic growth through their effect on capital account, total reserve, and investment. Outbound labor migration reduced unemployment and speeds economic growth. They induce investment and increase reserves, but they also put an upward pressure on overall price and induce imported inflation.

Research limitations/implications

Best utilization of these remittances can be achieved if they are mainly used for production rather than for consumption purposes. Remittances of foreign labor must be controlled to reduce leakages of the foreign currencies. Scheduled decrease in demand for foreign labor in Jordan is a must. But it must be accompanied by getting rid of the non‐reasonable “shame culture”, encouraging entrepreneurship, and enhancing quality of jobs.

Originality/value

The paper provides decision and policy makers with informative analysis of the net impact inbound and outbound labor migration. This analysis helps in drafting labor policies and regulations. The households sector is a key player for the success of these policies.

Details

International Journal of Development Issues, vol. 9 no. 1
Type: Research Article
ISSN: 1446-8956

Keywords

Article
Publication date: 9 July 2018

Junaid Ahmed, Mazhar Mughal and Inmaculada Martinez-Zarzoso

The purpose of this paper is to analyze differential consumption patterns of Pakistani migrant households resulting from foreign and domestic remittances.

Abstract

Purpose

The purpose of this paper is to analyze differential consumption patterns of Pakistani migrant households resulting from foreign and domestic remittances.

Design/methodology/approach

Using the Working-Leser model and a number of matching techniques, the authors analyze a representative household survey carried out in 2010–2011 to compare various expenditure categories of recipient and non-recipient households across different income brackets.

Findings

Results show that foreign remittances lead to significant consumption changes. Contrary to the widely held view, remittances do not raise the budget share on consumer goods and recreation, while allocation on education increases substantially. Households receiving domestic remittances also reflect strong focus on human capital with significantly higher shares of health and education. Recipients of international transfers living below one dollar a day spend proportionally more on food compared with their non-recipient counterparts whereas their education and health budget shares are not dissimilar.

Practical implications

The positive effect of remittances on expenditures on human capital coupled with a lack of evidence suggesting an increase in the share of conspicuous spending resulting from remittances highlights the beneficial role that remittances play in a developing country.

Originality/value

Extant literature lacks consensus on whether migrant remittances should be treated as a temporary or permanent source of household income. In this study, the authors argue and empirically show that the two need not be mutually exclusive, and may co-exist depending on the nature of remittances and household characteristics.

Details

International Journal of Social Economics, vol. 45 no. 7
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 18 April 2022

Sisira Dharmasri Jayasekara

This study aims to discuss the consequences of trade-based money laundering (TBML) and informal remittance services on the sustainability of the position of balance of…

Abstract

Purpose

This study aims to discuss the consequences of trade-based money laundering (TBML) and informal remittance services on the sustainability of the position of balance of payments and net foreign assets of a small open economy.

Design/methodology/approach

This paper uses a case study design using facts related to TBML and informal remittance services on the balance of payment and net foreign assets of Sri Lanka.

Findings

The contextual analysis reveals that the growth of the informal economy promotes informal remittance services in Sri Lanka. The policy decision to peg local currency to US dollars as a result of a shortage of foreign exchange had forced people to use informal channels for different purposes. The unclear and vague customer due diligence process of the anti-money laundering and countering the financing of terrorism (AML/CFT) regime also has forced people to use informal remittance services. Criminals especially drug traffickers have grabbed the promoted informal remittance services to transfer proceeds from Sri Lanka to overseas drug suppliers. On the other hand, systematic deficiencies in monitoring and regulation of movement of fund transfers and merchandise across borders provide opportunities for criminals to use different TBML techniques to transfer funds. These limitations force policymakers and regulators to think of developing a comprehensive payment ecosystem to prevent money laundering and terrorist financing. Therefore, the global initiative is required to move towards a payment ecosystem from a recommendation-based AML/CFT regime to reduce global crimes.

Research limitations/implications

This study was designed to discuss the implications of TBML and informal remittance services on the balance of payments and net foreign assets in a small open economy. The structure and size of the economy, the strength of the overall economy and the AML/CFT regime will play an important role in controlling criminal activities and combating money laundering of an economy; hence, the impact of TBML and informal remittance services will vary accordingly across the countries

Originality/value

This paper is an original work done by the authors, which discusses the implications of TBML and informal remittance services on the balance of payments and net foreign assets of an emerging market context.

Details

Journal of Money Laundering Control, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 11 May 2012

B. Mak Arvin and Byron Lew

Studies on the determinants of remittances focus primarily on a single country or undertake cross‐country analyses using aggregate data. By comparison, there is a dearth…

1292

Abstract

Purpose

Studies on the determinants of remittances focus primarily on a single country or undertake cross‐country analyses using aggregate data. By comparison, there is a dearth of empirical evidence on the determinants of remittances from multiple host to multiple destination countries. To address this deficiency, the purpose of this paper is to use a novel dataset which captures these bilateral flows.

Design/methodology/approach

The paper concentrates on three sets of explanatory variables: those which characterize the pair relationship, those that pertain to migrants' host country, and those related to the migrants' home country.

Findings

Cultural and political factors play a fundamental role. Altruism is not key in migrant remittances; investment motives are more important. Bilateral aid inflows bear a direct relationship to remittances. The marginal effect of happiness (in migrants' host and home countries) on remittances is positive for a large percentage of countries in the sample.

Practical implications

Results nullify the oft‐asserted role of remittances in assisting with adverse economic conditions, such as inflation. They also identify a possible nexus between remittances and foreign aid – a link that heretofore has not been identified or discussed in the literature or recognized by policy‐makers.

Originality/value

The contribution of the paper is its use of bilateral data to present evidence on remittances capturing not only North‐South, but also South‐South flows. The paper also contributes to the literature by considering, for the first time, some additional variables as potential determinants of remittances, chief among them the level of happiness of migrants' host and home countries, as well as the level of aid disbursed to migrants' home country.

Details

Journal of Economic Studies, vol. 39 no. 2
Type: Research Article
ISSN: 0144-3585

Keywords

Open Access
Article
Publication date: 15 June 2021

Amna Zardoub

Globalization occupies a central research activity and remains an increasingly controversial phenomenon in economics. This phenomenon corresponds to a subject that can be…

Abstract

Purpose

Globalization occupies a central research activity and remains an increasingly controversial phenomenon in economics. This phenomenon corresponds to a subject that can be criticized through its impact on national economies. On the other hand, the world economy is evolving in a liberalized environment in which foreign direct investment plays a fundamental role in the economic development of each country. The advent of financial flows – foreign direct investment, remittances and official development assistance – can be a key factor in the development of the economy. The purpose of this study is to analyze the effect of financial flows on economic growth in developing countries. Empirically, different approaches have been used. As part of this study, an attempt was made to use a combined autoregressive distributed lag (ARDL) panel approach to study the short-term and long-run effects of financial flows on economic growth. The results indicate ambiguous effects. Economically, the effect of financial flows on economic growth depends on the investor’s expectations.

Design/methodology/approach

To study the short-run and long-run effects of financial flows on economic growth, this paper considers an empirical approach based on the panel ARDL. This model makes it possible to distinguish between the short-run effect and the long-run one. This type of model is based on three estimators, namely, mean group, pooled mean group (PMG) and dynamic fixed effect.

Findings

Results confirm the existence of a long-run relationship because the adjustment coefficient (error correction parameter) is negative and statistically significant. This paper finds that the PMG estimator is more consistent and more efficient. In the short-run, foreign direct investment do negatively affect economic growth, the effect is no significant in the long-run. On the other hand, the effect of remittances on economic growth is significant in the short-run. However, it is no significant in the long-run. Finally, the results suggest that the effect of official development assistance on economic growth is insignificant; both in the long-run and in the short-run.

Originality/value

To study the interaction between financial flows and economic growth, some empirical methodology are used such as the dynamic panel data and the autoregressive vector (VAR) model. In this study, we apply the panel ARDL model to analyze the short-run and the long-run effect for each financial flow on economic growth. The objective is to study the heterogeneity on dynamic adjustment in the short-term and long-term.

Details

PSU Research Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2399-1747

Keywords

Article
Publication date: 26 November 2018

Jamal G. Husein

The purpose of this paper is to investigate the long-run impact of foreign aid and workers’ remittances on Jordanian economic growth using time series data for the period…

Abstract

Purpose

The purpose of this paper is to investigate the long-run impact of foreign aid and workers’ remittances on Jordanian economic growth using time series data for the period 1970–2014. Following the most recent literature, the author also assess whether economic policy enhances economic growth and whether aid effectiveness is conditional on levels of economic policy.

Design/methodology/approach

The author employs unit root tests that allow for endogenously determined structural breaks (Perron, 1997) and properly utilize the autoregressive distributed lag (ARDL) or bounds testing approach to cointegration by applying both the F- and the t-test statistics (Pesaran et al., 2001). The analysis is applied to 12 different models that incorporates the various types and sources of foreign aid.

Findings

Empirical results suggest that aid and its various components, and workers’ remittances have had a positive and significant long-run impact on economic growth. Empirical results also show: no evidence supporting the hypothesis that aid is only or more effective in spurring economic growth during periods of “good” macroeconomic policy, i.e., when Jordan has undertaken World Bank Structural Adjustment Programs (SAPs); no robust evidence supporting the World Bank’s claim that SAPs are growth enhancing. Moreover, the author found strong empirical evidence suggesting that exports and human capital are also major determinants of long-run growth in Jordan.

Research limitations/implications

Although Jordan and the region at large have experienced periods of major political instability that may have had a varying impact on the economy, lack of a reliable and lengthy time series measure that accounts for political instability is not available to include in the study.

Practical implications

Using cointegration analysis, our empirical evidence reveals that foreign aid, labor remittances, exports and human capital have had a robust positive long-run impact on economic growth. Hence, the Jordanian government should promote policies that encourage donor countries and agencies to further extend aid to Jordan. Moreover, policies that promote exports and facilitate labor mobility to neighboring countries should also be encouraged and promoted.

Originality/value

Despite receiving a significant amount of foreign aid and labor remittances in the last 50 years, the author found no time series study that tested the long-run impact of these external financing sources on growth in Jordan. This study fills that gap and extends the analysis to test whether macroeconomic policy is growth enhancing and whether aid (and several of its components) are only effective or more effective in promoting growth during periods of “good” macroeconomic policy, i.e., when Jordan has undertaken a World Bank SAP.

Details

International Journal of Social Economics, vol. 46 no. 4
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 28 December 2020

Ernesto Aguayo-Téllez, Adelaido García-Andrés and Jose N. Martinez

This paper aims to analyse the differential impact of foreign and domestic remittances on household expenditure shares.

Abstract

Purpose

This paper aims to analyse the differential impact of foreign and domestic remittances on household expenditure shares.

Design/methodology/approach

This study uses micro-data from a very large and detailed income-expenditure survey in Mexico and runs consumption-share Engel equations to estimate income (expenditure) elasticities for different consumption goods groups. Trying to account for the standard problems of endogeneity, this paper considers only nuclear households with migrant fathers and compare households that receive remittances from abroad, from within Mexico and those not receiving remittances.

Findings

This study finds that international remittances have a larger impact on the expenditure shares of women’s clothes, insurances and durable goods, while domestic remittances have a larger impact on the share of income dedicated to food, health and education.

Originality/value

Based on the results, differences in consumption shares between families receiving foreign and domestic remittances might depend not only on the relative size of the income transfer but also on the nature of the transfer and the sender’s capacity to monitor in person the use of those remittances. The results indicate that households that receive remittances from abroad present higher shares of consumption of some goods the literature commonly associates with the mothers’ preferences.

Details

International Journal of Development Issues, vol. 20 no. 2
Type: Research Article
ISSN: 1446-8956

Keywords

Open Access
Article
Publication date: 29 March 2021

Rasha Qutb

Migrants’ remittances to Egypt have increased considerably in both size and importance over the past 40 years. This increase has made Egypt one of the top remittance

1646

Abstract

Purpose

Migrants’ remittances to Egypt have increased considerably in both size and importance over the past 40 years. This increase has made Egypt one of the top remittance recipients in the world and the leading recipient country in the Middle East. As migrant remittances are one of Egypt's main sources of foreign capital, this study aims to identify the impact of these remittances on economic growth.

Design/methodology/approach

The study collects annual data on migrant remittances sent to Egypt during the period 1980–2017. The study uses the Augmented Dickey–Fuller test and Johnsen's Co-integration test to establish long-run relationships between variables. Then, a vector error correction model (VECM) is used to combine long-run and short-run dynamics, and a Granger causality test is performed. Finally, diagnostic tests of the VECM are conducted.

Findings

Results reveal that migrants’ remittances to Egypt are countercyclical in the sense that they have a long-term negative impact on economic growth. These results are determined by the Granger causality between migrants' remittances, inflation rate and imports.

Practical implications

The study can help policymakers to develop appropriate policies to turn migrants' remittances into a reliable source of capital that could result in a stable economic growth.

Originality/value

Although various empirical studies have examined the growth effect of remittances, most of them are based on cross-country data. This study contributes to the field by attempting to close a gap in the literature by empirically analyzing the impact of remittances on a single country over a long period.

Details

Review of Economics and Political Science, vol. 7 no. 3
Type: Research Article
ISSN: 2356-9980

Keywords

Article
Publication date: 5 November 2020

Muhammad Tahir, Ahmad Ali Jan, Syed Quaid Ali Shah, Md Badrul Alam, Muhammad Asim Afridi, Yasir Bin Tariq and Malik Fahim Bashir

The purpose of this paper is to explore the contending role of important external inflows on the economic growth of Pakistan economy. The main purpose behind focusing on…

Abstract

Purpose

The purpose of this paper is to explore the contending role of important external inflows on the economic growth of Pakistan economy. The main purpose behind focusing on Pakistan is that it is receiving significant inflows from different international sources such as International Monetary Fund, World Bank and Asian Development Bank.

Design/methodology/approach

The study adopted the autoregressive distributed lag cointegration approach for the purpose of exploring the long-run cointegrating relationship among the variables. As Pakistan Government had been implementing some major liberalization policies during 1990s, data from 1976 to 2018 is used to estimate the specified models to reflect the impact of the surge of foreign inflows occurring from that time. In addition, error correction model is estimated for examining the short-run relationships.

Findings

The findings revealed the significant role played by different inflows in accelerating the economic growth. According to results, in the long run, all inflows, for example, Foreign direct investment (FDI), debt, official developdment assistance and remittances, have influenced significantly and positively the economic growth. The two control variables such as inflation and employment level included in the model have also played their expected role in the growth process. In the short run, some of the variables such as remittances, FDI and inflation rate have lost their significance level while for debt, aid and employment level, the signs of their coefficients become reversed.

Practical implications

Based on the findings, the study suggests the policymakers of Pakistan economy to liberalize the economy and attract more inflows from the external sources to accelerate economic growth.

Originality/value

To the best of the authors’ knowledge, this is the first comprehensive empirical study on the role of foreign inflows in the process of economic growth in the context of Pakistan economy.

Details

Journal of Chinese Economic and Foreign Trade Studies, vol. 13 no. 3
Type: Research Article
ISSN: 1754-4408

Keywords

Article
Publication date: 12 November 2019

Nihar Ranjan Jena and Narayan Sethi

The purpose of this paper is to empirically investigate whether inward remittance leads to export performance in selected South Asian economies over the time period of 1993–2017.

Abstract

Purpose

The purpose of this paper is to empirically investigate whether inward remittance leads to export performance in selected South Asian economies over the time period of 1993–2017.

Design/methodology/approach

The stationarity of the variables is checked by Levin, Lin and Chu t, Breitung t-stat., Im, Pesaran and Shin W-stat., ADF–Fisher and Philips–Perron–Fisher panel unit root tests. Panel Granger Causality is used to verify the short-run causality. Pedroni’s, Kao’s and Johansen–Fisher panel cointegration approaches are employed to examine the long-run relationship among the variables. Panel VECM is used to confirm the existence of a long-run relationship among the variables.

Findings

Panels FMOLS and DOLS show that remittance inflows have negatively impacted the export performance of the selected South Asian countries during the study period. Granger Causality and VECM test confirm the existence of short-run and long-run relationship among the variables. The authors conclude that inward remittance is affecting export performance negatively during the study period. Furthermore, inward remittances occupy a major source of development finance for selected South Asian countries.

Originality/value

The study uses a dynamic macroeconomic modeling framework to assess the inward remittance on export performance in South Asian countries. Taking into account the diversity of the level of growth experienced by the five countries in the Asian region, the study uses an appropriate regression technique, i.e. panel dynamic OLS whose results are robust. As exports are a proven way to further economic growth, this study fills a vital gap in the literature by ascertaining the degree of impact of remittances in influencing outbound exports from the South Asian region.

Details

International Journal of Social Economics, vol. 47 no. 2
Type: Research Article
ISSN: 0306-8293

Keywords

1 – 10 of over 2000