How does the flow of remittances affect the trade balance of the Middle East and North Africa?

Farzanegan, Mohammad Reza; Hassan, Sherif

doi:10.1080/17487870.2019.1609357

Cited by 19 publications

(11 citation statements)

References 46 publications

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“…Graph 3. Trade balance of the countries Source: The author calculates from research data (World Bank, 2017) Our finding is consistent with the previous results in the evidence of the countries in the Sub-Sahara Africa (SSA) region (Okodua & Olayiwola, 2013) or in the Middle Eastern and North Africa (MENA) region (Farzanegan & Hassan, 2016). Our result is also supported by the studies done by specific country data in Nepal (Bhatta, 2013), in Serbia (Jovicic & Mitrovic, 2006, in Nigeria (Olubiyi, 2014) or Kenya (Kagochi & Kiambigi, 2012).…”

Section: Conducting Research and Resultssupporting

confidence: 90%

“…The quantitative result implied that remittances had a negative effect on exports and a positive effect on imports, so we could think that remittances had a negative impact on the trade balance in the case of the Nigerian economy. Farzanegan and Hassan (2016) identified the role of remittances in the trade balance with a sample including eleven countries in the Middle Eastern and North Africa (MENA) region in 1980-2013. They found that the inflow of remittances had an increasing effect on trade deficit (or negative effect on trade balance) by triggering imported-led consumption expenditures in the economies.…”

Section: Literature Reviewmentioning

confidence: 99%

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Impact of remittance inflows on trade balance in developing countries

Tùng¹

2018

Economics &Amp; Sociology

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Remittances have been fastly increasing in developing world over the past decades, however, there is only a few evidence about the relationship between remittance inflows on the trade balance in the recipient countries. Our paper investigates the effect of remittance inflows on trade balance with a sample including 17 countries in the Asia-Pacific region in the period 1980-2015, which now is the largest recipient group compares others but there is no study in the region-level. The estimated results of the OLS, 2-SLS and PGMM regressions also strongly indicated a new evidence that remittance inflows had a negative effect on the trade balance of the countries in the sample. Furthermore, our results confirmed that the annual GDP per capita growth negatively affected on the trade balance which implies that the growth of income maybe leads to rising the imports values and imbalance in international trade of countries. However, the impact of exchange rate on the trade balance was a positive one in the case of the Asia-Pacific region. Our paper has provided new evidence which could help the policymakers in order to have some solutions to enhance the efficiency of remittance inflows to the economies in the future.

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Section: Conducting Research and Resultssupporting

confidence: 90%

Section: Literature Reviewmentioning

confidence: 99%

Impact of remittance inflows on trade balance in developing countries

Tùng¹

2018

Economics &Amp; Sociology

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“…This appreciation reduces the competitive strength of exports (Okodua and Olayiwola 2013). Moreover, these transfers trigger the consumption expenditures attributable to imports (Farzanegan and Hassan 2016).…”

Section: Madalla and Wu Test (1999)mentioning

confidence: 99%

Short- and Long-Term Effects of Financial Flows on Economic Growth

Zardoub

Abed

2019

Journal of Economic Integration

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Globalization represents a central research activity and remains an increasingly controversial phenomenon in economics. It corresponds to a subject that can be criticized through its impact on national economies. In contrast, the world economy is evolving in a liberalized environment wherein Foreign Direct Investment plays a fundamental role in the economic development of each country. The advent of financial flows-Foreign Direct Investment, remittances, and official development assistance-can be key factors in economic development. This article analyzes the effect of financial flows on economic growth in developing countries. Empirically, different approaches have been employed. As part of this work, an attempt was made to use a combined autoregressive distributed lag panel approach to study the short-and long-term effects of financial flows on economic growth. The results indicate ambiguous effects.

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“…However, the stability of inflowing remittances in Egypt is a critical issue that needs a regular investigation for two reasons. First, remittance flows to the MENA region driven by inflows to Labour Abundant countries (Farzanegan and Hassan, 2016). That makes Egypt the top recipient of remittances in the MENA region.…”

Section: Introductionmentioning

confidence: 99%

The response of remittances inflows to asymmetric oil price shocks in Egypt

Zahran

2019

REPS

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Purpose The purpose of this paper is to explore and analyse the dynamic relationship between remittances inflows of Egyptians working abroad and asymmetric oil price shocks. Design/methodology/approach This study uses a vector autoregressive (VAR) model to explain the impulse response functions (IRFs) and the forecast error variance decomposition (FEVD). The rationale behind using these tools is its ability to examine the dynamic effects of our variables of interest. Findings The impulse response functions confirmed that remittance inflows have various responses to asymmetric oil price shocks. For instance, inflowing remittances increase in response to positive oil price shocks, while it decreases in response to negative oil price shocks. Also, the results indicate that the responses are significant in the short and medium-run and insignificant in the long run. The magnitude of these responses reaches its peak or trough in the third year. Further, the variance decomposition reveals that oil price decreases are more influential than oil price increases. Originality/value This means that remittances inflows in Egypt are pro-cyclical with oil price shocks. That explained by the fact that more than one-half of those remittances sent from GCC countries where real economic growth is very pro-cyclical with the oil prices. This empirical assessment will help policymakers to determine the behaviour of remittances and highlights the impact of different kinds of oil prices shocks on remittances. Unlike the little existing literature, this study is the first study applied the VAR model using a novel dataset spanning 1960-2016.

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How does the flow of remittances affect the trade balance of the Middle East and North Africa?

Cited by 19 publications

References 46 publications

Impact of remittance inflows on trade balance in developing countries

Impact of remittance inflows on trade balance in developing countries

Short- and Long-Term Effects of Financial Flows on Economic Growth

The response of remittances inflows to asymmetric oil price shocks in Egypt

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