What Drives Bilateral Remittances to Pakistan? A Gravity Model Approach

Ahmed, Junaid; Martínez‐Zarzoso, Inmaculada

doi:10.2139/ssrn.2445370

Cited by 7 publications

(7 citation statements)

References 57 publications

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“…Considering whether banking sector development (BSD) is a major determinant of migrant remittances flows, the long-run estimates show that the coefficient of BSD is positive and significant at 1% suggesting that BSD is a significant driver of migrant remittances flows in the region. These results are in line with previous works (Ahmed and Martinez-Zarzoso, 2014;Panda and Trivedi, 2015;Heffernan, 2018;Onwuka, 2019;Omon, 2021) who affirmed that banking sector development and equity market development are key determinants of migrant remittances. The implication of this outcome is that the existence of a developed financial market tends to drive migrant remittances into the region.…”

Section: Panel Regression Estimatessupporting

confidence: 93%

Does financial market development really drive migrant remittances’ flow in Sub-Saharan Africa?

Ikpesu

2023

IJSE

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PurposeThe discussion on international migration has become a significant part of globalization and a topical issue in international relations, especially in developing economies which mostly relies on migrant remittances. The purpose of the study is to examine whether financial market development (equity market development and banking sector development) really drives migrant remittance flow in Sub-Saharan Africa (SSA).Design/methodology/approachThe study employs the dynamic heterogeneous panel data approach-the pool mean group (PMG) and the mean group (MG) techniques in analyzing the model based on data obtained from 27 SSA countries covering the period 2000–2020.FindingsThe findings of the study revealed that financial market development (equity market development and banking sector development) is a key driver of migrant remittances flows in the SSA region. In addition, the study revealed that the following macroeconomic variables such as real interest rate, unemployment rate, global growth, emigration, and economic growth are also determinants of migrant remittances flows in the SSA region.Originality/valueThe reviewed empirical literature revealed that several studies documents that the macroeconomic determinants of migrant remittances include inflation, GDP, interest rate, exchange rate, population growth, financial sector development and unemployment rate. Most of these studies fail to capture both equity market development and robust banking sector development (financial market development) as critical drivers of migrant remittances flow in SSA. Also, this study uses a robust measure of equity market development and banking sector development, unlike previous studies.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-05-2023-0361

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Section: Panel Regression Estimatessupporting

confidence: 93%

Does financial market development really drive migrant remittances’ flow in Sub-Saharan Africa?

Ikpesu

2023

IJSE

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“…The complementarity hypothesis urge that the development financial sector would reduce transaction costs and positively affect remittances inflow; whereas, the substitutability hypothesis ascertains that the workers' remittances and financial development of the home country are negatively associated. The empirical studies on Pakistan have revealed a significant positive effect of financial development validating complementarity proposition,(Ahmed and Martinez-Zarzoso 2014;and Umair and Waheed 2017).…”

mentioning

confidence: 88%

“…The economic conditions in the host countries play an important role in international migration and remittance outflow. The literature on remittances has concluded a significant positive effect of host countries' economic condition and remittances inflow to Pakistan, (Abbas, 2016;Ahmed and Martinez-Zarzoso 2014;and Umair and Waheed 2017). The economic performance of GCC countries despite continuous efforts of diversification, dependent on the demand for crude oil and oil prices.…”

Section: Review Of Literaturementioning

confidence: 99%

Impact of oil prices on remittances to Pakistan from GCC countries: evidence from panel asymmetric analysis

Abbas

2020

OPEC Energy Review

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International migration and remittances from oil-exporting Gulf countries are important sources of employment, income, and foreign exchange for Pakistan. This study investigates the asymmetric impact of oil prices on remittances to Pakistan from GCC countries, over the period 1980 to 2018, by employing the recently advanced non-linear panel Pooled Mean Group (PMG) model. The findings show that oil prices and remittance are asymmetrically associated. The increasing oil prices have a significant positive effect only in the long run; whereas, reducing oil prices reveal a significant negative effect only in the short run. Findings of other explanatory variables show that the economic condition in host countries, exchange rate, and trade relations have positive effects only in the long run; whereas the economic condition in the home country has significant negative effects in the long run and positive effect in the short run. This study urges oil exports to stabilize oil supply and prices, and Pakistan to enhance trade relations, exchange rate adjustments, and financial development..

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“…While just over 2 million Pakistanis are working and living in Saudi Arabia, close to 2.7 million Indians live in the kingdom. Pakistan’s total remittances from abroad stand are close to US$20 billion per annum, out of which approximately US$6 billion come from Saudi Arabia (Ahmed & Martinez-Zarzoso, 2014). India’s total remittances from abroad stand close to US$80 billion per annum, out of which US$10.5 billion come from Saudi Arabia (Rajan, 2020).…”

Section: Saudi Arabia’s Growing Relationship With Indiamentioning

confidence: 99%

Saudi Arabia–Pakistan Relations: An Age of Uncertainty or Decline?

Zweiri

James

2021

Contemporary Review of the Middle East

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This article aims to analyze the relationship between Pakistan and Saudi Arabia from 2015 when the latter refused to cooperate on the kingdom’s war in Yemen. The relationship can be understood through the dependency theory and its paradigm of aid dependence, which explain Pakistan’s external reliance on foreign nations like Saudi Arabia and China. The relationship between Pakistan and Saudi Arabia is asymmetrical, considering long-lasting religious, economic, and security ties. Pakistan’s dependence on the Saudis for repeated economic bailout packages and loans to support its finances highlights the nature of this unbalanced relationship. Furthermore, the situation in Kashmir and Saudi Arabia’s increasingly close ties with India have worsened the Saudi relations with Pakistan. Pakistan’s neighbor, India, seeks to fill this void, as it is now Saudi Arabia’s fourth largest trading partner. This article also considers the military aspect of the relationship as Pakistan’s nuclear capabilities are among the most critical factors determining its strategic relationship with Saudi Arabia. Finally, the article considers Pakistan’s mediation role in conflicts related to Saudi Arabia.

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What Drives Bilateral Remittances to Pakistan? A Gravity Model Approach

Cited by 7 publications

References 57 publications

Does financial market development really drive migrant remittances’ flow in Sub-Saharan Africa?

Does financial market development really drive migrant remittances’ flow in Sub-Saharan Africa?

Impact of oil prices on remittances to Pakistan from GCC countries: evidence from panel asymmetric analysis

Saudi Arabia–Pakistan Relations: An Age of Uncertainty or Decline?

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