Do Transfer Costs Matter for Foreign Remittances? A Gravity Model Approach
2016 | journal article. A publication with affiliation to the University of Göttingen.
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Details
- Authors
- Ahmed, Junaid; Martinez-Zarzoso, Inmaculada
- Abstract
- Using bilateral data on remittance flows to Pakistan for 23 major host countries, this is the first study that examines the effect of transaction costs on foreign remittances. The authors find that the effect of transaction costs on remittance flows is negative and significant; suggesting that a high cost will either refrain migrants from sending money back home or make them remit through informal channels. They also find that remittances arc facilitated by the existence of migrant networks and improvements in home and host country financial services. Distance; which has been used in previous studies as an indicator of the cost of remitting, is found to be a poor proxy.
- Issue Date
- 2016
- Status
- published
- Publisher
- Kiel Inst World Economy
- Journal
- Economics The Open-Access Open-Assessment E-Journal
- Organization
- Wirtschaftswissenschaftliche Fakultät
- ISSN
- 1864-6042
- Sponsor
- Spanish MINECO [ECO2014-58991-C3-2-R]; University Jaume I [P1.B2013-06]