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Modelling the Macroeconomic Determinants of Workers' Remittances: The Case of Jordan

Author

Listed:
  • Ghazi Al-Assaf

    (Business Economics Department, The University of Jordan, Amman 11942, Jordan.)

  • Abdullah M. Al-Malki

    (Department of Administrative Sciences,King Saud University,Riyadh,KSA)

Abstract

This paper explores the main macroeconomic factors, in both host and home countries that affect workers' remittances. Several macroeconomic variables are taken into account in a cointegration analysis of the long-run relationship among remittances and their macroeconomic determinants as well as the short -run dynamics. The study employs the ARDL and VECM approaches to find out the main macroeconomic determinants that affect remittances to Jordan. Annual data for the period 1972-2009 are used. The empirical results show that macroeconomic factors of host countries are much more significant than home country macroeconomic factors. This confirms the fact that remittances are most likely to be influenced by external factors rather than internal factors. The bounds test used in the ARDL framework indicates that remittances flow to Jordan is cointegrated with the level of income in Jordan, level of income and exchange rates in t he host countries. The findings of the study show that the speed of adjustment in the VECM is significant and relatively slow.

Suggested Citation

  • Ghazi Al-Assaf & Abdullah M. Al-Malki, 2014. "Modelling the Macroeconomic Determinants of Workers' Remittances: The Case of Jordan," International Journal of Economics and Financial Issues, Econjournals, vol. 4(3), pages 514-526.
    • Handle: RePEc:eco:journ1:2014-03-7
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    References listed on IDEAS

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    Cited by:

    1. López Parra, Elibeth & Cruz-Rodríguez, Alexis, 2016. "Determinantes macroeconómicos de las remesas en los países del DR-CAFTA [Macroeconomic determinants of remittances in the countries of DR- CAFTA]," MPRA Paper 68886, University Library of Munich, Germany.
    2. Dhirendra Man Thapa, 2021. "Situation Of Foreign Employment And Remittance In Nepal: A Case Study Of Simta Rural Municipality Of Nepal," Malaysian E Commerce Journal (MECJ), Zibeline International Publishing, vol. 5(1), pages 42-44, July.
    3. Soma Rani Sutradhar, 2020. "The impact of remittances on economic growth in Bangladesh, India, Pakistan and Sri Lanka," International Journal of Economic Policy Studies, Springer, vol. 14(1), pages 275-295, February.
    4. Siti Mas’udah, 2020. "Remittances and Lifestyle Changes Among Indonesian Overseas Migrant Workers’ Families in Their Hometowns," Journal of International Migration and Integration, Springer, vol. 21(2), pages 649-665, June.
    5. Raza, Syed Ali & Shah, Nida & Khan, Waqas Ahmed, 2017. "Do Workers’ Remittances Increase Terrorism? Evidence from South Asian Countries," MPRA Paper 86745, University Library of Munich, Germany, revised 2017.
    6. Ali Emam , Md & Chen, Tinggui & Leibrecht, Markus, 2021. "Inward Worker Remittances and Economic Growth: The Case of Bangladesh," Asian Journal of Applied Economics/ Applied Economics Journal, Kasetsart University, Faculty of Economics, Center for Applied Economic Research, vol. 28(2), pages 43-62, December.
    7. Ummya Salma & Md. Fazlul Huq Khan & Md. Masum Billah, 2023. "Foreign Capital and Economic Growth: Evidence from Bangladesh," Papers 2312.04695, arXiv.org.

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    More about this item

    Keywords

    Workers' Remittances; Time Series Analysis; Cointegration; ARDL; VECM; Jordan;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances

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