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1 – 10 of 306
Open Access
Article
Publication date: 24 October 2023

Md. Saiful Islam and Abul Kalam Azad

Personal remittance and ready-made garments (RMG) export incomes have emerged as the largest source of foreign income for Bangladesh's economy. The study investigates their impact…

Abstract

Purpose

Personal remittance and ready-made garments (RMG) export incomes have emerged as the largest source of foreign income for Bangladesh's economy. The study investigates their impact on income inequality and gross domestic product (GDP) as a control variable, using time-series yearly data from 1983 to 2018.

Design/methodology/approach

It employs the Autoregressive Distributed Lag (ARDL) estimation and the Toda-Yamamoto (T-Y) causality approach. The ARDL estimation outcomes confirm a long-run association among the above variables and validate the autoregressive characteristic of the model.

Findings

Personal remittances positively contribute to reducing the income gap among the people of the society and declining income inequality. In contrast, RMG export income and economic growth contribute to further income inequality. The T-Y causality analysis follows the ARDL estimation outcomes and authenticates their robustness. It reveals a feedback relationship between remittance inflow and the Gini coefficient, unidirectional causalities from RMG export income to income inequality and economic growth to income inequality.

Research limitations/implications

The finding has important policy implications to limit the income gaps between low and high-income groups by channeling incremental income to the lower-income group people. The policymakers may facilitate further international migration to attract further remittances and may upgrade the minimum wage of the RMG workers.

Originality/value

The study is original. As far as the authors' knowledge goes, this is a maiden attempt to investigate the impact of personal remittances and RMG export income on income disparity in the case of Bangladesh.

Details

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

Keywords

Open Access
Article
Publication date: 23 January 2023

Umar Mohammed and Erdal Tanas Karagöl

This paper investigates the relationship between remittances, institutional quality and investment in Sub-Saharan African (SSA) countries using data from 2004 to 2018.

Abstract

Purpose

This paper investigates the relationship between remittances, institutional quality and investment in Sub-Saharan African (SSA) countries using data from 2004 to 2018.

Design/methodology/approach

The two-stage least squares (2SLS) estimator is the main methodology used, while the system generalized method of moments (Sys-GMM) technique is employed to test the robustness of the results.

Findings

The results show a positive and significant impact of remittances on investment in SSA. The findings further reveal a substitutional linkage between remittances and institutions in promoting investment. In essence, remittances serve as investment capital in countries with poor institutions. The results also show that the marginal significance of remittances as a source of funds for investment decreases in countries with well-developed institutions.

Research limitations/implications

The sample excludes some of the SSA countries due to the unavailability of data.

Practical implications

In the face of current institutional weaknesses, there is a need for SSA countries to prioritize policies that encourage the effective use of remittances for business activities. Furthermore, SSA countries must improve their economic freedom and democratic practices by reducing government size, protecting property rights, and promoting respect for political and civil rights.

Originality/value

This is the first study to analyze the relationship between remittances, institutional quality and investment in SSA. It also provides a novel framework for future research on the remittance–investment nexus.

Details

Journal of Business and Socio-economic Development, vol. 3 no. 4
Type: Research Article
ISSN: 2635-1374

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 recipients in…

3016

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

Open Access
Article
Publication date: 21 October 2019

Mohamed Samir Abdalla Zahran

The purpose of this paper is to explore and analyse the dynamic relationship between remittances inflows of Egyptians working abroad and asymmetric oil price shocks.

2285

Abstract

Purpose

The purpose of this paper is to explore and analyse the dynamic relationship between remittances inflows of Egyptians working abroad and asymmetric oil price shocks.

Design/methodology/approach

This study uses a vector autoregressive (VAR) model to explain the impulse response functions (IRFs) and the forecast error variance decomposition (FEVD). The rationale behind using these tools is its ability to examine the dynamic effects of our variables of interest.

Findings

The impulse response functions confirmed that remittance inflows have various responses to asymmetric oil price shocks. For instance, inflowing remittances increase in response to positive oil price shocks, while it decreases in response to negative oil price shocks. Also, the results indicate that the responses are significant in the short and medium-run and insignificant in the long run. The magnitude of these responses reaches its peak or trough in the third year. Further, the variance decomposition reveals that oil price decreases are more influential than oil price increases.

Originality/value

This means that remittances inflows in Egypt are pro-cyclical with oil price shocks. That explained by the fact that more than one-half of those remittances sent from GCC countries where real economic growth is very pro-cyclical with the oil prices. This empirical assessment will help policymakers to determine the behaviour of remittances and highlights the impact of different kinds of oil prices shocks on remittances. Unlike the little existing literature, this study is the first study applied the VAR model using a novel dataset spanning 1960-2016.

Details

Review of Economics and Political Science, vol. 8 no. 6
Type: Research Article
ISSN: 2356-9980

Keywords

Open Access
Article
Publication date: 25 September 2017

Issah Justice Musah-Surugu, Albert Ahenkan, Justice Nyigmah Bawole and Samuel Antwi Darkwah

The much-trumpeted Green Climate Fund and several other official financial mechanisms for financing adaptation to climate change under the UN Framework Convention on Climate…

5124

Abstract

Purpose

The much-trumpeted Green Climate Fund and several other official financial mechanisms for financing adaptation to climate change under the UN Framework Convention on Climate Change have fallen short in meeting adaptation needs. Many poorer people are still grappling with the scourge of climate change impacts. Consequently, there has been a dominant research focus on climate change financing emanating from official development assistance (ODA), Adaptation Fund, public expenditure and private sector support. However, there has been little attempt to examine how migrants’ remittances can close adaptation financing gaps at the local level, ostensibly creating a large research gap. This paper aims to argue that migrants’ remittances provide a unique complementary opportunity for financing adaptation and have a wider impact on those who are extremely vulnerable to climate change.

Design/methodology/approach

The paper is aligned to the qualitative research approach. Both secondary and primary data acquired through interviews and focus group discussions were used for the study. Multiple sampling methods were also used to select the respondents.

Findings

The findings show that remittances are used to finance both incremental costs of households’ infrastructure and consumption needs, as well as additional investment needs to be occasioned by ongoing or expected changes in climate.

Originality/value

In the wake of dwindling government/public revenue, ODA and poor commitment of Annex II countries to fulfil their financial obligations, the study makes the following recommendations: First, the financial infrastructure underpinning money transfers in both sending and recipient countries should be improved to make transfers attractive. Second, significant steps should be taken to reduce the fees on remittance services, especially for the small transfers typically made by poor migrants. Finally, adequate climatic information should be made available to local people to ensure that remittances are applied to the right adaptation option to avoid maladaptation.

Details

International Journal of Climate Change Strategies and Management, vol. 10 no. 1
Type: Research Article
ISSN: 1756-8692

Keywords

Open Access
Article
Publication date: 5 October 2021

Umar Mohammed

The purpose of this paper is to examine the relationship between remittances, institutions and human development (HD) in Sub-Saharan African (SSA) countries using data from 2004…

3082

Abstract

Purpose

The purpose of this paper is to examine the relationship between remittances, institutions and human development (HD) in Sub-Saharan African (SSA) countries using data from 2004 to 2018. The study attempts to answer two critical questions: Do the increasing remittances inflow to the region have any effect on human capital development? and does the effect of remittances on human development vary depending on the level of institutional quality?

Design/methodology/approach

The analysis uses a dynamic model; system Generalized Method of Moments (Sys-GMM) as this approach controls for the endogeneity of the lagged dependent variable; thus, when there is a correlation between the explanatory variable and the error term, which is normally associated with remittances, it also controls for omitted variable bias, unobserved panel heterogeneity and measurement errors in the estimation.

Findings

The findings indicate a positive and significant impact of remittances on HD in SSA. The results further reveal a substitutional relationship between institutions and remittances in stimulating HD. The estimations mean that remittances promote HD in countries with a weak institutional environment. The findings also establish that the marginal significance of remittances as a source of capital for HD falls in countries with well-developed institutions.

Practical implications

To increase the flow of remittances, policymakers should implement policies that increase the likelihood of both skilled and unskilled migrants sending remittances.

Originality/value

Most empirical research on the impact of remittances on HD does not tackle the problem of endogeneity associated with remittances. This study, however, provides empirical evidence by using Sys-GMM that solves the problem. The current study also is the first work to examine the relationship between remittances, institutions and HD in SSA and provides a new guide for future research on the remittance and HD nexus.

Details

Journal of Economics and Development, vol. 24 no. 2
Type: Research Article
ISSN: 1859-0020

Keywords

Open Access
Article
Publication date: 28 July 2020

Folorunsho M. Ajide and John A. Olayiwola

In this paper, we investigate the impact of remittances on control of corruption in Nigeria for a period of 1986–2016.

2028

Abstract

Purpose

In this paper, we investigate the impact of remittances on control of corruption in Nigeria for a period of 1986–2016.

Design/methodology/approach

The study uses ARDL modeling framework, dynamic OLS estimation, variance decomposition and impulse response analysis to examine the relationship between the two variables.

Findings

The study finds that remittances significantly improve the control of corruption in Nigeria. We further examine the robustness test of the results using dynamic OLS estimation, variance decomposition and impulse response analysis. Our results remain significant and consistent to the earlier one reported in ARDL framework which supports the extant literature.

Practical implications

Our study suggests that international remittances can be used, through the cross-border transfer of norms and practices, to significantly impact the socioeconomic progresses of a country by reducing corruption.

Originality/value

The existing studies on the relationship between corruption and remittances document conflicting results. In addition, study on corruption - remittances nexus that specifically focuses on any African country is largely absent despite the fact that most of the countries in the region are recognized as highly corrupt. This paper provides insights on how remittances can be used as part of tool kits to control corruption in African nation.

Details

Journal of Economics and Development, vol. 23 no. 1
Type: Research Article
ISSN: 1859-0020

Keywords

Open Access
Article
Publication date: 24 May 2021

Oluyemi Theophilus Adeosun and Oluwaseyi Omowunmi Popogbe

Human capital flight from developing countries to developed nations has been rising and giving concerns to governments and scholars alike. This paper aims to explore the impact…

3482

Abstract

Purpose

Human capital flight from developing countries to developed nations has been rising and giving concerns to governments and scholars alike. This paper aims to explore the impact migration from Nigeria has on economic output growth by focusing on the migration rate, remittances, population growth and secondary school enrolment. This has not received adequate attention in the literature, as many papers have primarily focused on the impact of remittances on economic growth.

Design/methodology/approach

Leveraging on the macro-level approach to migration, remittances and the economy, this research considers the nexus among the human capital flight and output growth variables by using the autoregressive distributed lag (ARDL) method of analysis for time series data between 1986 and 2018.

Findings

The net migration rate from Nigeria was found from the empirical analysis to be more disadvantageous for the economy, given its negative relationship with economic growth despite the large volume of foreign incomes (remittances). It also shows that secondary school enrolment positively and significantly impacted the Nigerian growth rate in the long run.

Originality/value

This research has widened the use of variables by combining net migration rate, remittances from abroad, population growth rate and secondary school enrolment to obtain a more robust outcome with implications for research and practice.

Details

Review of Economics and Political Science, vol. 6 no. 3
Type: Research Article
ISSN: 2356-9980

Keywords

Open Access
Article
Publication date: 8 March 2022

Thu Thi Hoai Nguyen, Hung Manh Le, Le Quoc Hoi and Hang Thu Pham

This study estimates impact of remittances from internal migration on households' use of bank services in Vietnam.

1244

Abstract

Purpose

This study estimates impact of remittances from internal migration on households' use of bank services in Vietnam.

Design/methodology/approach

This study uses data from the Vietnam Household Living Standards Survey and the two-stage least squares method (2SLS).

Findings

The results show that receiving internal remittance increases households' probability of having bank accounts and using card services. However, these impacts are different between rural and urban areas.

Research limitations/implications

The results of this study reveal the useful role of internal remittance in increasing the probability of households using bank services, thereby enhancing financial inclusion in Vietnam.

Originality/value

Different from the previous studies, the purpose of this paper is to analyse the impact of internal remittance on the use of bank services in Vietnam at the household level. This paper targets internal migration because it is the main type of migration in Vietnam. Besides, to the best of the authors’ knowledge, this research is the first one that compares the role of internal remittance on households' use of bank services in rural and urban areas in Vietnam.

Details

Journal of Economics, Finance and Administrative Science, vol. 27 no. 53
Type: Research Article
ISSN: 2218-0648

Keywords

Open Access
Article
Publication date: 16 September 2021

Amna Zardoub and Faouzi Sboui

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

5126

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 – FDI, remittances and official development assistance – can be a key factor in the development of the economy. The subject of this article is to analyses the effect of financial flows on economic growth in developing countries. Empirically, different approaches have been employed. As part of this work, an attempt was made to use a panel data approach. The results indicate ambiguous effects and confirm the results of previous work.

Design/methodology/approach

The authors seek to study the effect of foreign direct investment, remittances and official development assistance (ODA) and some control variables i.e. domestic credit, life expectancy, gross fixed capital formation (GFCF), inflation and three institutional factors on economic growth in developing countries by adopting the panel data methodology. Then, the authors will discuss empirical tests to assess the econometric relevance of the model specification before presenting the analysis of the results and their interpretations that lead to economic policy implications. As part of this work, the authors have rolled panel data for developing countries at an annual frequency during the period from 1990 to 2016. In a first stage of empirical analysis, the authors will carry out a technical study of the heterogeneity test of the individual fixed effects of the countries. This kind of analysis makes it possible to identify the problems retained in the specific choice of econometric modeling to be undertaken in the specificities of the panel data.

Findings

The empirical results validate the hypotheses put forward and indicate the evidence of an ambiguous effect of financial flows on economic growth. The empirical findings from this analysis suggest the use of economic-type solutions to resolve some of the shortcomings encountered in terms of unexpected effects. Governments in these countries should improve the business environment by establishing a framework that further encourages domestic and foreign investment.

Originality/value

In this article, the authors adopt the panel data to study the links between financial flows and economic growth. The authors considered four groups of countries by income.

Details

PSU Research Review, vol. 7 no. 2
Type: Research Article
ISSN: 2399-1747

Keywords

1 – 10 of 306