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Remittances Flow to Pakistan: A Gravity Approach

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  • Shujaat Abbas

Abstract

This study investigates macroeconomic determinant and potential of remittances flow to Pakistan from selected 12 major partners, using the augmented Gravity model on panel framework from 1995 to 2012. The Generalized Least Square technique is used to explain the macroeconomic behaviour of remittances flow. The result shows that the standard Gravity variables explain the remittances flow, and the result of augmented variables shows that the real exchange rate and inflation rate have significant positive, whereas the interest rate has significant negative impact. The binary variable for common language and GCC shows significant positive impact indicating importance of the Gulf region and common language for remittances flow. The potential of remittance flow shows existence of high potential in Japan, Germany, Norway, Qatar and Kuwait respectively. It urges Pakistan to send migrant workers to potential economies, and make domestic environment investment friendly and reduce interest rate to encourage remittances.

Suggested Citation

  • Shujaat Abbas, 2016. "Remittances Flow to Pakistan: A Gravity Approach," Journal Transition Studies Review, Transition Academia Press, vol. 23(1), pages 97-106.
    • Handle: RePEc:ase:jtsrta:v:23:y:2016:i:1:p:97-106:id:121
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    Cited by:

    1. Shujaat Abbas, 2018. "Free Trade Agreements and International Trade Flow of Pakistan: the Gravity Modelling Approach," Journal Global Policy and Governance, Transition Academia Press, vol. 7(2), pages 71-84.
    2. Abbas, Shujaat, 2020. "Impact of oil prices on remittances to Pakistan from GCC countries: evidence from panel asymmetric analysis," MPRA Paper 107246, University Library of Munich, Germany.
    3. Shujaat Abbas & Abdul Waheed, 2019. "Pakistan’s Global Trade Potential: A Gravity Model Approach," Global Business Review, International Management Institute, vol. 20(6), pages 1361-1371, December.
    4. Abbas Shujaat & Waheed Abdul, 2018. "Import Determinants and Potential Markets: A Panel Data Gravity Modelling Analysis for Bahrain," Review of Middle East Economics and Finance, De Gruyter, vol. 14(1), pages 1-7, April.

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    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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