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Remittances and deforestation in developing countries: Is institutional quality paramount?

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  • Afawubo, Komivi
  • Noglo, Yawo Agbényégan

Abstract

This study examines the impact of remittance inflows on deforestation in developing countries. We also investigate the role of institutional quality in enhancing remittances’ effect in reducing deforestation. Our results suggest that overall remittances reduce deforestation. We show that remittances’ reduction effect on deforestation is greater in middle-income countries than in low-income countries. Considering institutional quality, our findings suggest that, for the entire sample, and in low- and middle-income countries, control of corruption, political stability, government effectiveness and rule of law act to reduce deforestation. Moreover, institutional quality enhances the impact of remittances on reducing deforestation in the entire sample and in middle-income countries. In contrast, in low-income countries, institutional quality does not complement remittances to reduce deforestation.

Suggested Citation

  • Afawubo, Komivi & Noglo, Yawo Agbényégan, 2019. "Remittances and deforestation in developing countries: Is institutional quality paramount?," Research in Economics, Elsevier, vol. 73(4), pages 304-320.
    • Handle: RePEc:eee:reecon:v:73:y:2019:i:4:p:304-320
    DOI: 10.1016/j.rie.2019.10.001
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    2. Galarza, Francisco & Kámiche Zegarra, Joanna & Gómez de Zea, Rosario, 2023. "Roads and deforestation: do local institutions matter?," Working Papers 23-03, Centro de Investigación, Universidad del Pacífico.
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    More about this item

    Keywords

    Deforestation; Remittances; Institutional quality; Developing countries;
    All these keywords.

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • P37 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Legal
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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