IDEAS home Printed from https://ideas.repec.org/a/nrb/journl/v33y2021i1p1.html
   My bibliography  Save this article

Role of Workers Remittances in Export Performance of Nepal: Gravity Modelling Approach

Author

Listed:
  • Ramesh Chandra Paudel

    (Central Department of Economics, Tribhuvan University, Kirtipur, Kathmandu, Nepal)

  • Tara Prasad Bhusal

    (Central Department of Economics, Tribhuvan University, Kirtipur, Kathmandu, Nepal)

Abstract

Role of workers’ remittance seems to be an imperative part of Nepalese economy for about two decades. The remittances inflow has supported to maintain the foreign reserves at the national level and consumption in household level. This paper investigates the role of remittances in export performance of Nepal employing the gravity modelling approach using annual data for the period of 26 years, from year 1993 to 2018. First, we document the scenario of remittances and export nexus, then conduct an econometric estimation for the exports flows from Nepal to its trading partners. The major finding indicates that the remittances have a statistically significant negative impact on export performance, which is largely impacted by the size of the trading partner’s economy as indicated by the estimation’s results. The study suggests for an urgent attention from policy makers to make the remittance in favor of exports by developing the export strategies. In this regard, a special focus on exporting to the rich economies may be a good way to boost the export performance of Nepal.

Suggested Citation

  • Ramesh Chandra Paudel & Tara Prasad Bhusal, 2021. "Role of Workers Remittances in Export Performance of Nepal: Gravity Modelling Approach," NRB Economic Review, Nepal Rastra Bank, Economic Research Department, vol. 33(1-2), pages 1-13, October.
  • Handle: RePEc:nrb:journl:v:33:y:2021:i:1:p:1
    DOI: https://doi.org/10.3126/nrber.v33i1-2.47987
    as

    Download full text from publisher

    File URL: https://www.nrb.org.np/contents/uploads/2021/10/Vol-33_art1.pdf
    Download Restriction: no

    File URL: https://libkey.io/https://doi.org/10.3126/nrber.v33i1-2.47987?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Ramesh Chandra Paudel & Kankesu Jayanthakumaran, 2009. "Financial Liberalization and Performance in Sri Lanka," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 10(1), pages 127-156, January.
    2. Muhammad Asif Shamim & Dr.Iqbal Ahmed Panhwar & Syed Muhammad Ahsan Rizvi & Ehsan Ahmed Shaikh, 2015. "Impact Of Remittances On Export Performance : Time Series Evidence From Pakistan," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 11(2), pages 123-135.
    3. Ramesh C. Paudel, 2019. "Exports Performance of Nepal: What Can Be Done?," Applied Economics and Finance, Redfame publishing, vol. 6(5), pages 92-103, September.
    4. Chandan Sapkota, 2013. "Remittances in Nepal: Boon or Bane?," Journal of Development Studies, Taylor & Francis Journals, vol. 49(10), pages 1316-1331, October.
    5. Mamta B. Chowdhury & Fazle Rabbi, 2014. "Workers' remittances and Dutch Disease in Bangladesh," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 23(4), pages 455-475, June.
    6. Muhammad Asif Shamim & Dr.Iqbal Ahmed Panhwar & Syed Muhammad Ahsan Rizvi & Ehsan Ahmed Shaikh, 2015. "Impact Of Remittances On Export Performance : Time Series Evidence From Pakistan," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 11(2), pages 11-10.
    7. Magda Kandil & Ida A. Mirzaie, 2008. "The Impact Of Capital and Remittance Flows on Economic Performance in MENA Countries," Working Papers 440, Economic Research Forum, revised 09 Jan 2008.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rohan Byanjankar & Mira Sakha, 2021. "Role of Remittances on Rural Poverty in Nepal-Evidence from Cross-Section Data," NRB Economic Review, Nepal Rastra Bank, Economic Research Department, vol. 33(1-2), pages 45-72, October.
    2. Dambar Uprety, 2017. "The Impact of Remittances on Economic Growth in Nepal," Journal of Development Innovations, KarmaQuest International, vol. 1(1), pages 114-134, February.
    3. repec:kqi:journl:2017-1-6 is not listed on IDEAS
    4. Muntasir Murshed & Seemran Rashid, 2020. "An Empirical Investigation of Real Exchange Rate Responses to Foreign Currency Inflows: Revisiting the Dutch Disease Phenomenon in South Asia," The Economics and Finance Letters, Conscientia Beam, vol. 7(1), pages 23-46.
    5. Kapri, Kul & Ghimire, Shankar, 2020. "Migration, remittance, and agricultural productivity: Evidence from the Nepal Living Standard Survey," World Development Perspectives, Elsevier, vol. 19(C).
    6. Zhang, Wei-Wei & Sadiq, Ramla & Khan, Tahseen Mohsan & Khan, Muhammad Mohsan, 2021. "Policy implications of remittances, trade liberalization and Dutch disease – A comparative analysis based on income categorization," Resources Policy, Elsevier, vol. 72(C).
    7. Aziz, M. Nusrate & Sen, Somnath & Sun, Puyang & Wu, Lichao, 2015. "Migrant Workers’ Remittances and Economic Growth: The Role of Financial Development," MPRA Paper 66992, University Library of Munich, Germany.
    8. Dhruba Bhandari, 2020. "Are Households Utilizing Remittance on Quality Education? An Empirical Study from Nepal," Journal of Development Innovations, KarmaQuest International, vol. 4(1), pages 179-195, July.
    9. Mehdi Chowdhury & Dragana Radicic, 2019. "Remittances and Asset Accumulation in Bangladesh: A Study Using Generalised Propensity Score," Journal of International Development, John Wiley & Sons, Ltd., vol. 31(6), pages 475-494, August.
    10. Hari Sharma & John Gibson, 2019. "Civil War and International Migration from Nepal: Evidence from a Spatial Durbin Model," Working Papers in Economics 19/06, University of Waikato.
    11. Paudel, Ramesh C. & Burke, Paul J., 2015. "Exchange rate policy and export performance in a landlocked developing country: The case of Nepal," Journal of Asian Economics, Elsevier, vol. 38(C), pages 55-63.
    12. Hao, Linna & Ahmad, Shabbir & Chang, Hsu-Ling & Umar, Muhammad, 2021. "Knowledge spill-over and institutional quality role in controlling Dutch disease: A case of BRICS countries," Resources Policy, Elsevier, vol. 72(C).
    13. Mohammad Reza Farzanegan & Sherif Maher Hassan, 2020. "How does the flow of remittances affect the trade balance of the Middle East and North Africa?," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 23(2), pages 248-266, July.
    14. Sharma, Rishi R., 2023. "An anatomy of Nepal’s remarkable export decline: A note," Journal of Asian Economics, Elsevier, vol. 89(C).
    15. Forsyth, Tim, 2021. "Time to change? Technologies of futuring and transformative change in Nepal’s climate change policy," LSE Research Online Documents on Economics 107544, London School of Economics and Political Science, LSE Library.
    16. Anupam Das & Adian McFarlane & Luc Carels, 2021. "Empirical exploration of remittances and renewable energy consumption in Bangladesh," Asia-Pacific Journal of Regional Science, Springer, vol. 5(1), pages 65-89, February.
    17. Thi Huyen Le & Yoshinori Nakagawa & Yutaka Kobayashi, 2021. "Conditions under Which Rural-to-Urban Migration Enhances Social and Economic Sustainability of Home Communities: A Case Study in Vietnam," Sustainability, MDPI, vol. 13(15), pages 1-18, July.
    18. Erol BULUT, Abdiqadar Abdignani MOHAMED, 2018. "Remittances and Poverty Reduction in Somalia," Fiscaoeconomia, Tubitak Ulakbim JournalPark (Dergipark), issue 4.
    19. Sena Kimm Gnangnon, 2019. "Remittances Inflows and Trade Policy," Remittances Review, Remittances Review, vol. 4(2), pages 117-142, October.
    20. Hari Sharma & John Gibson, 2020. "Effects of International Migration on Child Schooling and Child Labour: Evidence from Nepal," Working Papers in Economics 20/07, University of Waikato.
    21. Shankar Ghimire & Kul Prasad Kapri, 2020. "Does the Source of Remittance Matter? Differentiated Effects of Earned and Unearned Remittances on Agricultural Productivity," Economies, MDPI, vol. 8(1), pages 1-15, January.

    More about this item

    Keywords

    Export performance; remittances; gravity modelling approach;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nrb:journl:v:33:y:2021:i:1:p:1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Publication Division NRB (email available below). General contact details of provider: https://edirc.repec.org/data/nrbgvnp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.