Determinants of Bilateral Remittance Flows
This paper explores the determinants of workers remittances using a novel dataset of bilateral remittance flows. The paper finds that some of the variables commonly used in gravity equations are very powerful in explaining remittance flows. The evidence on the motives to remit is mixed, but altruism may be less of factor than commonly believed. Most strikingly, remittances do not seem to increase in the wake of a natural disaster and appear aligned with the business cycle in the home country, suggesting that remittances may not play a major role in limiting vulnerability to shocks. To encourage remittances and maximize their economic impact, policies should be directed at reducing transaction costs, promoting financial sector development, and improving the business climate.
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Volume (Year): 8 (2008)
Issue (Month): 1 (October)
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References listed on IDEAS
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- Jacques Bouhga-Hagbe, 2004. "A Theory of Workers' Remittances with An Application to Morocco," IMF Working Papers 04/194, .
- Poonam Gupta, 2005. "Macroeconomic Determinants of Remittances; Evidence from India," IMF Working Papers 05/224, .
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2005-W22, Economics Group, Nuffield College, University of Oxford.
- John C. Bluedorn, 2005. "Hurricanes: Intertemporal Trade and Capital Shocks," Economics Series Working Papers 241, University of Oxford, Department of Economics.
- Elina Ribakova & BalÃ¡zs HorvÃ¡th & Dimitri G Demekas & Yi Wu, 2005. "Foreign Direct Investment in Southeastern Europe; How (and How Much) Can Policies Help?," IMF Working Papers 05/110, .
- Aggarwal, Reena & Demirguc-Kunt, Asli & Martinez Peria, Maria Soledad, 2006. "Do workers'remittances promote financial development ?," Policy Research Working Paper Series 3957, The World Bank.
- Serdar Sayan, 2006. "Business Cycles and Workers' Remittances; How Do Migrant Workers Respond to Cyclical Movements of GDP At Home?," IMF Working Papers 06/52, .
- repec:idb:brikps:publication-detail,7101.html?id=6701 is not listed on IDEAS
- Robert C. Feenstra & James R. Markusen & Andrew K. Rose, 2001. "Using the gravity equation to differentiate among alternative theories of trade," Canadian Journal of Economics, Canadian Economics Association, vol. 34(2), pages 430-447, May.
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