EXPLORING THE MACROECONOMIC DETERMINANTS OF REMITTANCES IN TOP REMITTANCES' RECIPIENT COUNTRIES

Abstract

This study aims to understand the reasons behind remittances sent by emigrants working abroad. It focuses on the top ten recipient countries, using data from the World Development Indicator (WDI) database covering 1991 to 2022. Various econometric tests were conducted to analyze the data, including descriptive statistics, correlation coefficients, and unit root tests such as Breitung and Im Pesaran and Shin tests. Dynamic Ordinary Least Squares (DOLS) and Panel ARDL models were used to explore long-term effects and relationships between macroeconomic variables and remittances. The findings indicate that remittances are motivated by both altruism and self-interest, showing both pro- cyclical and counter-cyclical patterns. The study recommends that governments in these countries develop policies to encourage remittances through formal banking channels and registered money transfer services. It suggests implementing attractive incentives using modern technology and mobile apps, and enforcing strict measures against informal and illegal money transfer operations like hawala and hundi.

Keywords

• macroeconomic determinants of remittances
• Top remittances recipient countries
• Dynamic OLS
• PMG