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European Journal of Scientific Research
…
183 pages
1 file
The international remittance is one of the important sources of foreign exchange earning in the country. Recently, Pakistan received over $4 billion as foreign remittances in 2006. The flows of funds through foreign remittances serve as a cushion balance of payment and foreign reserves. The paper investigated the determinants of international workers' remittances in Pakistan. The time series data was used to identify determinants of the international remittances in Pakistan. The stationary properties of each time series were investigated and each were found to be integrated of order one. Therefore, Cointegration and vector error correction models were used to establish the long run and short run relationship among the included variables in the research. The real remittances in Pakistan were found positively related with real GDP, real growth rate and unemployment rate and were negatively related with real wage rate, literacy rate and spread rate of banks in Pakistan. Based on re...
Journal of Advance Public Policy and International Affairs (JAPPIA)
The study targets the impact of personal remittances on economic growth in case of Pakistan for the time period 1980-2014. For this purpose, Foreign Direct Investment (FDI) and Human Capital are used as control variables. Using Augmented Dickey Fuller (ADF) and Philips-Peron (PP) unit root tests, all the variables came stationary at order one or I (1). Johansen Cointegration showed a long run relationship between personal remittances, FDI, human capital and economic growth. The results showed a positive long run impact of personal remittances, FDI and human capital on economic growth of Pakistan. Similarly, ECT (-1) term was -0.04 and also significant. Granger causality also showed a unidirectional causality running from personal remittances to economic growth. Moreover, the diagnostic tests showed normality of residuals, no autocorrelation and stationarity of residuals at level. Government should formulate such policies that encourage remittances in Pakistan by formulating reliable and efficient transfer mechanism to cheap transfer cost.
2013
Remittances play a signifi cant role in the economic development of recipient economy through different micro and macroeconomic channels. However, the adverse impact of remittances in the form of Dutch disease and infl ation cannot be overlooked. This study aims to examine the impact of remittance on infl ation and its different categories, namely, food infl ation, footwear and textile infl ation, housing and construction infl ation. Accordingly, four vectors have been formulized to capture the determinants of overall infl ation and its different categories with particular focus on remittances. The study employed Johansen (1990) and Johansen & Juselius (1990) cointegration technique to check the existence of long run relationship between remittances and infl ation. Vector Error Correction technique is further applied to examine the extent and direction of relationship between variables and to check the stability of models. The results indicated the existence of one cointegrated vect...
Global Regional Review, 2019
International migrant remittances are possibly the largest source of external finance in developing countries and this inflow have has considerable importance in the development of the financial sector. The present study aimed to analyze the link between workers remittances and development of the financial sector in the context of Pakistan. To carry out this empirical analysis, the study utilized a data set of annual frequency ranging from 1980 to 2015 (post-liberalization period). The econometric methodology of Auto-Regressive Distributed Lag (ARDL) has been used to get the short-run and long-run elasticities of the model. Overall findings suggested that there is a strong positive link between the inflow of remittances and the development of the financial sector in the context of Pakistan.
Ekonomski anali
The paper examines the dynamic relationship between the series of monetary aggregates M1 and M2 for the period 1972-2014. M1 and M2 are the dependent variables, while the explanatory variables are real income, discount rate, inflation rate, real exchange rate, and remittances. The ARDL bounds testing approach to cointegration is used to investigate the existence of long-run and short-run effects of remittances on monetary aggregates. The results show that remittances exert only positive effects on real narrow money demand in the end, suggesting that in Pakistan remittances are used for the purpose of consumption. Both money demand functions are stable in Pakistan, but the longrun effect of M1 remittances is a faster speed of adjustment to equilibrium (26.2%) than M2 remittances (21.3%). It is recommended that M1 be used as a monetary tool in Pakistan.
Remittances constitute a substantial part of a country’s financial inflows. The size of remittances in some cases has surpassed the amount of foreign direct investment and other financial inflows. Considering the large size of remittances, it can have an influence over macroeconomic variables especially on GDP and balance of payments. This study analyzes the relationship among remittances, balance of trade, inflation and GDP. The study used an annual dataset from 1978 to 2009. Stationarity of the variables has been checked by using ADF. The co-integration among variables has been analyzed by using the Engle Granger two step procedure and the Johnson’s co-integration method. A long run relationship has been found among workers’ remittances, GDP, inflation, and trade balances.
Workers' remittances have become the second foremost source of monetary flows to developing countries. Pakistan has experienced fluctuations in economic indicators in the past that hindered the flow of workers' remittances in the country. According to World Bank data, Pakistan has become fifth largest remittances receiving developing country in 2011. This paper explores the economic determinants of workers' remittances of Pakistan using annual data spanning from 1990 to 2010. Research aims to analyze the extent to which multi variables impacts the flow of workers' remittances in Pakistan. The research is causal and explanatory in nature and follows quantitative research design. This study identifies empirically verified economic determinants of workers' remittances of Pakistan by using multiple regression. The quantitative substantiation of multiple regression analysis shows that FDI, exchange rate and GDP appeared to be important determinants of workers' remittances, other determinants of workers' remittances are inflation rate and interest rate. In particular, workers' remittances increased with the increase in GDP and FDI. Contrasting to this, rise in interest rate and fluctuation in inflation level lowers the inflows of workers' remittances in Pakistan, as greater insecurity in relation to price changes in future period and high inflation reduces the return on funds remitted.
2013
This paper investigates the impact of foreign remittances on economic growth of Pakistan. We use secondary time series data for the period of 1978 to 2011. The multiple regression analysis is used to identify the relationship among the variables. GDP is taken as dependent variable while foreign remittances, FDI, inflation and exchange rate as independent variables. Augmented Dickey Fuller (ADF) test is used to check the stationary of variables and all variables found stationary at level. Ordinary Least Squares technique is applied to check the relation among these variables. Results indicate that foreign remittances have positive and significant relation with GDP of Pakistan while inflation and exchange rate has negative effect on economic growth. Foreign direct investment has positive but insignificant relation with GDP of Pakistan. One percent increase in foreign remittances will raise GDP by 0.25 percent. Our model is free from hetroskedasticity and autocorrelation with satisfactory functional form that suggests the stability of our model. The CUSUM and CUSUMSQ are showing that our model is structurally stable within the 5% of critical bounds. Pakistan needs stable and visionary government to enhance foreign capital inflow to boost investment and economic growth.
Journal of Business Research - Turk, 2014
We make this study for the purpose of getting logical answer about a very famous matter regarding contribution of worker's remittance in the growth of the economy of Pakistan. We also include different variables to evaluate the exact effect of foreign exchange earnings in economic growth of Pakistan by using time series data for the duration of 1991 to 2010. Here we applied OLS multiple regressions model and also check the assumptions of OLS by different diagnostic tests. The empirical and quantitative results describe that foreign remittance are the famous mean of economic growth and have significant positive relationship with each other. The productive use of this paper can help the economy of Pakistan to maintain and improve the economic growth by investing this money into different long term and short term projects. Pakistan's Government should provide different incentives and lower down the cost of transactions to attract the overseas Pakistani emigrants that sent money through unofficial ways.
2018
This study attempts to explore the relationship between remittances and the macroeconomic variables of Pakistan using gravity model for the period 2002–2013. The bilateral remittances from twenty-three major source countries were selected, which covered 90 percent of total remittances. The key findings of this study reveal that the economic performance of home countries has a positive and significant impact on remittances as revealed in migrants’ investment behavior. Moreover, the flow of remittances to Pakistan responds mainly due to the macroeconomic variables of remittance-receiving countries instead of the remittance-sending countries. Consequently, remittance receipts have become an important factor in promoting the economic growth of Pakistan. It is thus suggested that Pakistan should diversify migration destinations to stabilize remittance flows, promote the transfer of skilled migrants, improve the remittance transfer system, and use advanced technology to decrease the cost ...
This paper is an effort to examine the association between remittances and imports. The anticipated import function shows that worker's remittances play a substantial role in the determination of imports in the economy. In this study the researchers used different econometric techniques in order to measure the short-term and long-term relationship between worker's remittances and imports. The ARIMA, Johansen Cointegration test is used to determine the existence of a long-term relationship between the variables of the study. The results showed that the Normalized cointegrating coefficients are statistically significant and showed a stable and positive relationship between the two variables of the study. The analysis of Granger causality indicates the existence of a unidirectional causality from import to worker's remittances. This confirms that worker's remittances have no significant impact on the demand for imported goods rather imports have a positive impact on the worker's remittances of Pakistan.
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