Macroeconomic determinants of remittances: evidence from Romania

Bunduchi, Elena; Vasile, Valentina; Comes, Călin-Adrian; Ştefan, Daniel

doi:10.1080/00036846.2019.1584386

Cited by 19 publications

(16 citation statements)

References 31 publications

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“…The main motivation behind this study is the examination of the vital role that remittance and foreign direct investment (FDI) inflows play in fostering economic growth in developing economies. In fact, emigration is a phenomenon that has attracted a lot of media attention recently (Bilal et al 2012;Bălan et al 2013;Anghelache et al 2017aAnghelache et al , 2017bNoja et al 2018;Bunduchi et al 2019;Kausar et al 2019;Enkhtaivan et al 2021). In the postcommunism Western Balkans, the people leaving their home countries is relatively high.…”

Section: Introductionmentioning

confidence: 99%

Financing Growth through Remittances and Foreign Direct Investment: Evidences from Balkan Countries

Jushi

Hysa

Çela

et al. 2021

JRFM

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The ultimate goal of central banks, worldwide, is to promote the foundations for sustainable economic growth. In the case of developing economies, in particular, such objective requires time, huge efforts, attention, and plenty of resources in order to be accomplished to the fullest degree. This paper thoroughly investigates key factors affecting Balkan countries’ economic development (as measured by gross domestic product (GDP) growth), focusing especially on the impact of remittances. The analysis was done over an 18-year time interval (2000–2017) and builds on 144 observations. The data figures were retrieved from the World Bank database while two dummies were created to test the impact of the last financial crisis (2008–2012). Econometric tools were employed to carry out a broad analysis on the interdependencies that exist and, in particular, to determine the role of remittance income on growth. The vector auto regressive model was estimated using EViews software, and was used to come up with relevant insights. Empirical findings suggest the following: population growth, remittances, and labor force participation are insignificant factors for sustainable growth. On the other hand, previous levels of GDP, trade, and foreign direct investments (FDIs) appear to be relevant for the predictor. This research provides up-to-date conclusions, which can be considered during the decision-making process of central banks, as well as by government policymakers.

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Section: Introductionmentioning

confidence: 99%

Financing Growth through Remittances and Foreign Direct Investment: Evidences from Balkan Countries

Jushi

Hysa

Çela

et al. 2021

JRFM

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“…Externalities are especially relevant in developing countries, as the social benefits gained through access to technology, marketing and management knowledge are more important than private benefits. New production and marketing methods are spreading to other companies through labor migration, licensing or franchising, so that an entire business segment can gain a comparative advantage (Matei 2004;Comes et al 2018;Bunduchi et al 2019).…”

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confidence: 99%

Foreign Direct Investment and Trade—Between Complementarity and Substitution. Evidence from European Union Countries

Voica

Panait

Hysa

et al. 2021

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This aim of this work is to study the relationship between foreign direct investment (FDI) and trade. FDI is a driving force for economic growth for host countries. The positive effects of FDI are seen in many aspects of the economy. However, the implications of FDI on foreign trade are questionable. Therefore, this study uses a Granger causality technique to test whether the relationship between FDI and foreign trade is complementary or substitutive. The findings of this study indicate that this relationship appears to be complementary, and FDI investment does cause an increase in trade flow in the countries that are taken into consideration. This research aims to make a comparison between the relations of FDI flows of three groups of countries from the European Union (EU)—Romania and Bulgaria, the Visegrád Group and the Euro area—for the period of 2005 to 2019. However, the results indicate that this link between the variables is not yet found for the three group of countries, and further research is required in this aspect. This leads to the conclusion that the FDI impact on foreign trade of the host country depends on the type of investment and absorptive capacity of the receiver, the economic development of host and home countries, and not every type of FDI leads to more trade.

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“…In this sense, we can say that migration and remittances can act as mechanisms for adjusting the flows of labor resources between the countries of origin and those of destination. On the one hand, they are a consequence of the failure of the national policy of the country of origin manifested by the inability to meet the individual needs regarding the decent employment opportunities and the income obtained [74], and on the other, they can be a tool to support the economic growth. The impact of remittances for the countries of origin is significant, at least from the perspective of the beneficiary households.…”

Section: Discussionmentioning

confidence: 99%

“…As Romania occupies a top position in terms of the number of emigrants and the value of received remittances, numerous studies have analyzed different aspects related to remittances. The macroeconomic determinants of remittances to Romania were analyzed using the panel data model with several variables with potential influence on remittances, proving that the traditional influence factors (distance, diaspora concentration, or unemployment rate) are, currently, less important than the difference in salary [74].…”

Section: Estimation Of Evolution By Means Of Polynomial-time Regressionmentioning

confidence: 99%

Remittances, Migration and Gross Domestic Product from Romania’s Perspective

2019

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This study analyzes the evolution and trends of the share of remittances in gross domestic product (GDP) and the influence of migration on remittances in Romania. The analysis on data from Eurostat over 2008–2017 has three components: a statistical analysis, an estimation of evolution of indicators, and an estimation of impact of migration on remittances, using polynomial-time regression and difference equation models, respectively. The results showed that GDP and GDP/capita had a permanent increase, meaning an improvement in the standard of living in Romania, while the other indicators had an evolution with a period of sharp decline triggered by the global crisis, followed by a slow growth. We may conclude that the remittances represented and still represent a relatively stable financial resource for Romania as for the other emerging countries in Europe, affecting in a positive way the standard of living of the citizens, although their value has a tendency to decrease. At the same time, the negative effects of remittances, dependence on money received from migrants and the exodus of “brains” and skilled workers, must be considered, implying the necessity of government policies for a better use of remittances, i.e., mainly for investments and less for consumption.

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Macroeconomic determinants of remittances: evidence from Romania

Cited by 19 publications

References 31 publications

Financing Growth through Remittances and Foreign Direct Investment: Evidences from Balkan Countries

Financing Growth through Remittances and Foreign Direct Investment: Evidences from Balkan Countries

Foreign Direct Investment and Trade—Between Complementarity and Substitution. Evidence from European Union Countries

Remittances, Migration and Gross Domestic Product from Romania’s Perspective

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