The Effect of Remittances on Poverty in the Emerging Countries of the European Union

Mehedințu, Anca; Şoavă, Georgeta; Sterpu, Mihaela

doi:10.3390/su11123265

Cited by 18 publications

(9 citation statements)

References 30 publications

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“…The liberalization of capital movements and people worldwide, especially in Europe, have generated the reconfiguration of international financial flows. In addition, these phenomena have caused numerous economic, social, and political effects, both in the countries of origin and in the host countries (Gheasi and Nijkamp 2017;Mehedintu et al 2019). FDI has long been considered a universal panacea that would solve all problems related to the economic development of host countries.…”

Section: Introductionmentioning

confidence: 99%

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

Jushi

Hysa

Çela

et al. 2021

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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

View full text Add to dashboard Cite

show abstract

“…Advancement in achieving this objective may be what policymakers, especially in developing countries, have so desperately needed in recent decades to achieve by fostering economic growth, implementing reform policies, or combining both. However, the poverty rates have varied considerably across countries, depending on the actual success of their economic growth, which leads to sustainable development [1][2][3][4]. The efforts of international institutions and public authorities on sustainable development can also support the process of reducing poverty and increasing the wellbeing of the population.…”

Section: Introductionmentioning

confidence: 99%

Poverty—A Challenge for Economic Development? Evidences from Western Balkan Countries and the European Union

et al. 2020

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During the last few decades, economists have tried to find a solution to eradicate poverty, especially since the United Nations’ Sustainable Development Goals were launched. The target of Goal 1 is to end poverty in all its forms everywhere. While income inequality and unemployment have played a major part in contributing to poor wellbeing in the world, other factors such as political instability, a lack of good investment opportunities, and living conditions have contributed to it as well. Thus, in this work, the authors analyze the factors that impact poverty and compare these results between countries within the European Union and post-communist countries that include the Western Balkan (WB) countries: Albania, Bosnia and Herzegovina, Montenegro, North Macedonia, and Serbia. The method used consists of both descriptive statistics and multiple regression analysis using the fixed effect model where poverty is taken as the dependent variable. The data used in this study are gathered from the World Bank and Legatum Prosperity, during the period between 2009 and 2018. The results show that income inequality does indeed impact the further progress of poverty for both the EU and WB, while economic development in terms of GDP is shown to have a more significant impact on EU than in WB, where the most significant impact was through income per capita. Other factors such as education, investment environment, and especially unemployment also significantly impacted on decreasing the poverty rate in both economic zones.

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“…Thus, international development agencies and governments are considering the potential of employment and remittances to stimulate development in developing countries. In this regard, in a series of previous research on the emerging countries of the European Union [8][9][10], we studied the impact of remittances on economic growth and on poverty; we found that in the short term, the share of remittances in gross domestic product will maintain its upward trend for most of the countries analyzed, but the impact of the COVID-19 pandemic is unknown.…”

Section: Introductionmentioning

confidence: 99%

Impact of Employed Labor Force, Investment, and Remittances on Economic Growth in EU Countries

et al. 2020

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This paper analyzes the evolution and influence of gross domestic product per capita, labor force participation rate, gross fixed capital formation, and personal remittances on economic growth for European Union (EU) countries, using data from the World Bank (1996–2019) and from Eurostat (the first two quarters 2019–2020). The study has three components: statistical analysis, analysis of the evolution for each country and EU, and estimation of the impact on economic growth rate by using a linear multifactorial regression model for 1996–2019, 1996–2008, and 2009–2019. The model was validated by econometric techniques. The long-term causal relationship between exogenous and endogenous variables was validated by the Granger test. The results of the study show a differentiated evolution of the indicators, and that all indicators are severely affected by the 2008 financial crisis and the debut of the COVID-19 crisis in early 2020. The model used shows the significant positive influence of labor and investment, and the minor effect of remittances on economic growth. In the context of the COVID-19 epidemic, the results of the study could be arguments to be considered for the redesign of economic policies at European Union level.

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The Effect of Remittances on Poverty in the Emerging Countries of the European Union

Cited by 18 publications

References 30 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

Poverty—A Challenge for Economic Development? Evidences from Western Balkan Countries and the European Union

Impact of Employed Labor Force, Investment, and Remittances on Economic Growth in EU Countries

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