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Institutional Quality Effect on Remittances in the MENA Region

Author

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  • Imène Guetat

    (Sciences Economiques, Faculté des Sciences Economiques et de Gestion de Sousse)

Abstract

International worker's remittances have increased over the years to become a main source of income for developing countries. Workers' remittances have surpassed foreign direct investment and foreign aid. They proved to be particularly resilient during the latest global crisis, unlike other capital flows that fell sharply or even turned negative, especially for Middle East and North Africa (MENA) countries. Given the magnitude, and the stability of remittances, this paper aims to test the effects of institutional characteristics via the composite risk index on remittances inflows in MENA region. In order to deal with the possible endogeneity problem, a seemingly unrelated equation system" (SURE) proposed by Arnold Zellner, (1962) is used to estimate a model with endogenous variables for a sample of 15 MENA countries over the period 1984-2011. We highlight a negative relationship between remittances and the composite risk implying an increase of remittances when risk increases in the specific case of MENA. This result proves an altruistic motivation of the MENA migrant's decision to remit.

Suggested Citation

  • Imène Guetat, 2014. "Institutional Quality Effect on Remittances in the MENA Region," Working Papers hal-04098142, HAL.
    • Handle: RePEc:hal:wpaper:hal-04098142
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    Cited by:

    1. Doğan Barak & Mustafa Ünlü, 2024. "Economic Policy Uncertainty and Remittance Nexus: Evidence From Top 10 Remittance-receiving Countries," Politická ekonomie, Prague University of Economics and Business, vol. 2024(4), pages 653-675.
    2. Gömleksiz, Mustafa & Özsahin, Serife, . "The Regional Dynamics of Economic Growth: Evidence from GMM Estimation in Turkey," Asian Journal of Applied Economics, Kasetsart University, Center for Applied Economics Research, vol. 26(01).
    3. Fatma Zaarour & Ghlama Haddad & Adnene Ajimi, 2025. "Remittances and Economic Growth: Panel VAR," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(3), pages 11045-11062, September.
    4. Kechagia, Polyxeni & Metaxas, Theodore, 2020. "Institutional quality and FDI inflows: an empirical investigation for Turkey," MPRA Paper 104309, University Library of Munich, Germany.
    5. Angana Parashar SARMA & Muniyor KRISHNA, 2024. "Causal Nexus Between Remittance Inflow And Its Determinants, 1998-2020: Evidence From The South And Southeast Asian Lmics," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 24(1), pages 97-120.
    6. Dorsaf Sridi & Wafa Ghardallou, 2021. "Remittances and disaggregated country risk ratings in Tunisia: an ARDL approach," Middle East Development Journal, Taylor & Francis Journals, vol. 13(1), pages 191-211, January.
    7. Edelbloude, Johanna & Fontan Sers, Charlotte & Makhlouf, Farid, 2017. "Do remittances respond to revolutions? The Evidence from Tunisia," Research in International Business and Finance, Elsevier, vol. 42(C), pages 94-101.
    8. Dorsaf Sridi & Imene Guetat, 2020. "The direct and indirect risk impacts on remittances: A cross‐regional specific effects," African Development Review, African Development Bank, vol. 32(3), pages 288-302, September.
    9. Anupam Das & Leanora Brown & Adian Mcfarlane, 2023. "Economic Misery and Remittances in Jamaica," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 48(2), pages 33-52.

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