Identifying macro-determinants of remittance flows to a developing country: The case of Uganda

Ojede, Andrew; Lam, Eddery; Okot, Nicholas

doi:10.1080/09638199.2018.1546336

Cited by 12 publications

(11 citation statements)

References 43 publications

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“…Short‐run results, in general, reveal that positive and negative developments in oil prices have an asymmetric impact on remittances to India. Exchange rate depreciation appears to have a negative impact on remittance inflows, suggesting substitution effect in remittance sending behaviour and is in agreement with the findings of Yang, () and Ojede et al, (). The results further show that GDP per capita is negatively associated with remittances in the short run, providing confirmatory evidence that altruism theory holds, suggesting counter‐cyclicality of remittances to India, and corroborating the findings of Azizi (), Vacaflores (), and Azizi ().…”

Section: Resultssupporting

confidence: 91%

“…On the other hand, if remittances are altruistically motivated or transferred to repay loans that are taken to cover the cost of migration (Lucas and Stark (), a depreciation in the home country’s currency reduces the dollar equivalence of loans denominated in domestic currency. Consequently, migrant workers will reduce the amount of remittances which reflect the substitution effect (Yang, ; Guetat and Sridi, ; and Ojede et al , ). In addition, it is likely that a depreciation in the local currency triggers inflation, thus making goods and services expensive in the country of origin.…”

Section: Determinants Of Remittances: Theory and Literaturementioning

confidence: 99%

“…Similar findings are obtained by Al‐Mashat and Billmeier () for Egypt, by ILO () for Bangladesh, and by Abbas et al, () for Pakistan. On the other hand, Yang (), Guetat and Sridi (), and Ojede et al, () demonstrate that exchange rate is negatively related to remittance inflows. Finally, findings of Gupta (), Cooray and Mallick (), and Azizi () reveal that remittances are insensitive to changes in exchange rate.…”

Section: Determinants Of Remittances: Theory and Literaturementioning

confidence: 99%

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The asymmetric impact of oil prices on remittances: evidence from India

Akçay

Karasoy

2019

OPEC Energy Review

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Remittances make up a sizeable part of the Indian economy. Using recently advanced non‐linear autoregressive distributed lag (NARDL) model (Shin et al, 2014), this study aims to address the asymmetric impact of oil prices on international remittances over the period 1975–2017, in the context of India. The results reveal that: (i) changes in oil prices and remittances are asymmetrically associated in both short and long run; (ii) remittances react differently to changes in oil prices: while positive movements in oil prices lead to an increase in remittances, negative movements lower remittances; (iii) compared to positive oil price shocks, negative shocks have more profound impact on remittances in the long run; (iv) exchange rate has an asymmetric effect on remittances only in the short run; (v) financial development has negative influence on remittance inflows in the long run; and (vi) GDP per capita does not have any significant impact on remittance inflows in the long run, whereas it negatively affects remittances to India in the short run.

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Section: Resultssupporting

confidence: 91%

Section: Determinants Of Remittances: Theory and Literaturementioning

confidence: 99%

Section: Determinants Of Remittances: Theory and Literaturementioning

confidence: 99%

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The asymmetric impact of oil prices on remittances: evidence from India

Akçay

Karasoy

2019

OPEC Energy Review

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“…The depreciation of home currency increases the value of earned foreign currencies and stimulate remittances for self-interest objectives to buy house, land, and other consumer durable assets (Al-Mashat and Billmeier 2012;Abbas et al, 2017;and Akçay and Karasoy 2019). Whereas, if remittances are motivated by the altruistic objectives or repaying loans, a depreciation of home country's currency would reduce the dollar equivalence of loan denominated in domestic currency and reduce remittances that reflect the substitution effect (Yang, 2008;and Ojede et al, 2018). The abovementioned literature suggests an ambiguous effect of the depreciation of the home country's exchange rate.…”

Section: Review Of Literaturementioning

confidence: 99%

Impact of oil prices on remittances to Pakistan from GCC countries: evidence from panel asymmetric analysis

Abbas

2020

OPEC Energy Review

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International migration and remittances from oil-exporting Gulf countries are important sources of employment, income, and foreign exchange for Pakistan. This study investigates the asymmetric impact of oil prices on remittances to Pakistan from GCC countries, over the period 1980 to 2018, by employing the recently advanced non-linear panel Pooled Mean Group (PMG) model. The findings show that oil prices and remittance are asymmetrically associated. The increasing oil prices have a significant positive effect only in the long run; whereas, reducing oil prices reveal a significant negative effect only in the short run. Findings of other explanatory variables show that the economic condition in host countries, exchange rate, and trade relations have positive effects only in the long run; whereas the economic condition in the home country has significant negative effects in the long run and positive effect in the short run. This study urges oil exports to stabilize oil supply and prices, and Pakistan to enhance trade relations, exchange rate adjustments, and financial development..

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“…A positive relationship with the interest rate variables suggests that the remittances are more attracted by the investment return (Aydas et al 2005 ; Adams 2009 ). For example, Ojede et al ( 2019 ) find that a substantial increase in the domestic interest rate compared to the foreign interest rate makes domestic assets more attractive to the emigrants from Uganda. On the other hand, a weak investment motive is also shown by the insignificant interest rate differential estimates (Schiopu and Siegfried 2006 ; Chami et al 2008 ).…”

Section: Review Of Literaturementioning

confidence: 99%

Macroeconomic determinants of remittances to India

Jijin

Mishra

Nithin

2021

Econ Change Restruct

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Migration and remittances have always been an exciting arena of research for economists around the globe. Remittance flows have evolved as a significant economic variable over the past decade. In several developing countries, remittances exceed the other capital inflows and value of total exports. Thus, it is widely recognised as a potential funding source for economic development in emerging economies. The inflow of remittances to India has increased tremendously in the recent past making the country the highest recipient of remittances across the globe. Remittances are an essential component that contributes to narrowing the Current Account Deficit and has always been a stable constituent of the Balance of Payment. This paper is an attempt to explore the vital macroeconomic variables which determine the remittance flows to India. Notably, we enquire into the dominant motives of remittances in the Indian context. We employ an ARDL approach to cointegration to identify the macroeconomic determinants of remittances and find those crucial variables such as exchange rate, oil price, and domestic GDP substantially impact the flow of remittances. The results also indicate that the migrants are more vulnerable to the oil price shocks in host countries. The overall findings of our study are that (1) remittances are not countercyclical in the Indian context (2) remittances are subject to weak investment motive as opposed to the altruistic motive.

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Identifying macro-determinants of remittance flows to a developing country: The case of Uganda

Cited by 12 publications

References 43 publications

The asymmetric impact of oil prices on remittances: evidence from India

The asymmetric impact of oil prices on remittances: evidence from India

Impact of oil prices on remittances to Pakistan from GCC countries: evidence from panel asymmetric analysis

Macroeconomic determinants of remittances to India

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