IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/107244.html
   My bibliography  Save this paper

Remittances Flow to Pakistan: A Gravity Approach

Author

Listed:
  • Abbas, Shujaat

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

  • Abbas, Shujaat, 2016. "Remittances Flow to Pakistan: A Gravity Approach," MPRA Paper 107244, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:107244
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/107244/2/MPRA_paper_107244.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stark, Oded & Lucas, Robert E B, 1988. "Migration, Remittances, and the Family," Economic Development and Cultural Change, University of Chicago Press, vol. 36(3), pages 465-481, April.
    2. Mohammad Nishat & Nighat Bilgrami, 1993. "The Determinants of Worker's Remittances in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 32(4), pages 1235-1245.
    3. Ralph Chami & Connel Fullenkamp & Samir Jahjah, 2005. "Are Immigrant Remittance Flows a Source of Capital for Development?," IMF Staff Papers, Palgrave Macmillan, vol. 52(1), pages 55-81, April.
    4. Dani Rodrik, 2008. "The Real Exchange Rate and Economic Growth," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(2 (Fall)), pages 365-439.
    5. Giuliano, Paola & Ruiz-Arranz, Marta, 2009. "Remittances, financial development, and growth," Journal of Development Economics, Elsevier, vol. 90(1), pages 144-152, September.
    6. El-Sakka, M. I. T. & McNabb, Robert, 1999. "The Macroeconomic Determinants of Emigrant Remittances," World Development, Elsevier, vol. 27(8), pages 1493-1502, August.
    7. Shahid Hussain Javaid, 2009. "Dutch Disease Investigated: Empirical Evidence from Selected South-East Asian Economies," SBP Working Paper Series 31, State Bank of Pakistan, Research Department.
    8. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(2), pages 441-487.
    9. World Bank, 2014. "World Development Indicators 2014," World Bank Publications - Books, The World Bank Group, number 18237.
    10. Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 688-726, June.
    11. Benjamin F. Jones & Benjamin A. Olken, 2008. "The Anatomy of Start-Stop Growth," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 582-587, August.
    12. Mohammad Irfan, 2011. "Remittances and Poverty Linkages in Pakistan: Evidence and Some Suggestions for Further Analysis," PIDE-Working Papers 2011:78, Pakistan Institute of Development Economics.
    13. Ms. Huidan Huidan Lin, 2011. "Determinants of Remittances: Evidence From tonga," IMF Working Papers 2011/018, International Monetary Fund.
    14. Amar Iqbal Anwar & Mazhar Mughal, 2012. "Remittances, inequality and poverty in Pakistan: macro and microeconomic Evidence [Centre d'Analyse Théorique et de Traitement des données économiques REMITTANCES, INEQUALITY AND POVERTY IN PAKISTA," Working papers of CATT hal-01885153, HAL.
    15. Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-848, December.
    16. Amar Iqbal Anwar & Mazhar Mughal, 2012. "Remittances, inequality and poverty in Pakistan: macro and microeconomic Evidence [Centre d'Analyse Théorique et de Traitement des données économiques REMITTANCES, INEQUALITY AND POVERTY IN PAKISTA," Working papers of CATT hal-01885153, HAL.
    17. Mrs. Poonam Gupta, 2005. "Macroeconomic Determinants of Remittances: Evidence from India," IMF Working Papers 2005/224, International Monetary Fund.
    18. Amuedo-Dorantes, Catalina & Pozo, Susan, 2004. "Workers' Remittances and the Real Exchange Rate: A Paradox of Gifts," World Development, Elsevier, vol. 32(8), pages 1407-1417, August.
    19. Unbreen Qayyum & Muhammad Nawaz, 2014. "Remittances and Economic Growth: The Role of Financial Development," PIDE-Working Papers 2014:100, Pakistan Institute of Development Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. 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.
    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.

    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. Farid Makhlouf & Mazhar Mughal, 2013. "Remittances, Dutch Disease, And Competitiveness: A Bayesian Analysis," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 38(2), pages 67-97, June.
    2. James Dzansi, 2013. "Do remittance inflows promote manufacturing growth?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(1), pages 89-111, August.
    3. Farid Makhlouf & Mazhar Mughal, 2013. "Remittances, Dutch Disease, And Competitiveness: A Bayesian Analysis," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 38(2), pages 67-97, June.
    4. Farid Makhlouf & Adil Naamane, 2013. "The Impact of Remittances on Economic Growth: The Evidence from Morocco," Working Papers hal-01885148, HAL.
    5. Farid Makhlouf & Adil Naamane, 2013. "The Impact of Remittances on Economic Growth: The Evidence from Morocco," Working Papers hal-01885148, HAL.
    6. Bichaka Fayissa & Christian Nsiah, 2012. "Financial Development and Remittances in Africa and the Americas: A Panel Unit-Root Tests and Panel Cointegration Analysis," Working Papers 201201, Middle Tennessee State University, Department of Economics and Finance.
    7. Kalaj, Ermira Hoxha, 2010. "Remittances and Human Capital Investment: Evidence from Albania," MPRA Paper 49210, University Library of Munich, Germany.
    8. Junaid Ahmed & Mazhar Mughal & Inmaculada Martínez‐Zarzoso, 2021. "Sending money home: Transaction cost and remittances to developing countries," The World Economy, Wiley Blackwell, vol. 44(8), pages 2433-2459, August.
    9. Michael, Owiso, 2008. "Literature Review: Migration, Remittances and Development," MPRA Paper 104988, University Library of Munich, Germany, revised 2008.
    10. Christian Nsiah & Bichaka Fayissa, 2013. "Remittances and economic growth in Africa, Asia, and Latin American-Caribbean countries: a panel unit root and panel cointegration analysis," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 37(3), pages 424-441, July.
    11. Lim, Sokchea & Morshed, A.K.M. Mahbub & Turnovsky, Stephen J., 2023. "Endogenous labor migration and remittances: Macroeconomic and welfare consequences," Journal of Development Economics, Elsevier, vol. 163(C).
    12. Zakiyyah, Varachia, 2018. "Literature Review of Migration and Development," MPRA Paper 106444, University Library of Munich, Germany, revised 2018.
    13. Naheem Mahtab, 2015. "The Effect of Macroeconomic Variables on the Inflow of Remittance in Bangladesh," Economy, Asian Online Journal Publishing Group, vol. 2(1), pages 21-31.
    14. Acosta, Pablo A. & Lartey, Emmanuel K.K. & Mandelman, Federico S., 2009. "Remittances and the Dutch disease," Journal of International Economics, Elsevier, vol. 79(1), pages 102-116, September.
    15. repec:bla:opecrv:v:33:y:2009:i:3-4:p:184-197 is not listed on IDEAS
    16. Combes, Jean-Louis & Kinda, Tidiane & Ouedraogo, Rasmané & Plane, Patrick, 2019. "Financial flows and economic growth in developing countries," Economic Modelling, Elsevier, vol. 83(C), pages 195-209.
    17. Michael Clemens and David McKenzie, 2014. "Why Don't Remittances Appear to Affect Growth? - Working Paper 366," Working Papers 366, Center for Global Development.
    18. Ambrosius, Christian, 2012. "Are remittances a "catalyst" for financial access? Evidence from Mexican household data," Discussion Papers 2012/8, Free University Berlin, School of Business & Economics.
    19. Emmanuel Owusu-Sekyere & Reneé van Eyden & Francis M Kemegue, 2014. "Remittances and the Dutch Disease in Sub-Saharan Africa: A Dynamic Panel Approach," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 8(3), September.
    20. Flippo, Behnaz, 2009. "A Literature Review: Migration and Remittances," MPRA Paper 104877, University Library of Munich, Germany, revised 2009.
    21. Boris Fisera & Menbere Workie Tiruneh, 2023. "Beyond the Balassa-Samuelson Effect: Do Remittances Trigger the Dutch Disease?," Eastern European Economics, Taylor & Francis Journals, vol. 61(1), pages 23-65, January.

    More about this item

    Keywords

    remittances flow; gravity model; panel data; Pakistan;
    All these keywords.

    JEL classification:

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

    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:pra:mprapa:107244. 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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.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.