ECONOMIC AND POLITICAL DRIVERS OF REMITTANCE TRANSFER

Main Article Content

Nayef Alshammari Reyadh Faras Wael Alshuwaiee

Abstract

This paper explores the political and economic determinants of remittance transfers by foreign workers in hosting countries with an application to the case of the Gulf Cooperation Council (GCC) countries. Our empirical model is estimated with the fixed-effects technique applied on annual data covering the period 1996-2019. The main result confirms that both the economic and political stability do matter to remittance transfers. First, our findings suggest that higher per capita growth across the GCC region tends to discourage remittance transfers. Second, we find a statistically significant and positive relationship between oil prices and remittance transfers. Third, our findings show that political stability across the host countries can shape remittances. Put it simply, higher political stability tends to induce lower remittance outflows. While conventional findings on importance of economic factors for remittances are confirmed, this research signifies that any change in political stability across the GCC might affect decisions made by foreign workers. This finding has general implications for similar regions throughout the world suggesting that political stability has a strong effect on the flow of remittances.

Article Details

How to Cite
Alshammari, N., Faras, R., & Alshuwaiee, W. (2022). ECONOMIC AND POLITICAL DRIVERS OF REMITTANCE TRANSFER. The South East European Journal of Economics and Business, 17(1), 54-67. Retrieved from http://journal.efsa.unsa.ba/index.php/see/article/view/1768
Section
Scientific and Professional papers: Economics and Business
Author Biographies

Nayef Alshammari, Kuwait University, Kuwait

Nayef Alshammari, PhD (corresponding author)
Associate Professor
Department of Economics,
College of Business Administration
Kuwait University, Kuwait
Address: P.O. Box 5486, Safat 13055, Kuwait
E-mail: anayef.alshammari@ku.edu.kw
ORCID: 0000-0001-6309-0523

Reyadh Faras, Kuwait University, Kuwait

Reyadh Faras, PhD
Assistant Professor
Department of Economics
College of Business Administration
Kuwait University, Kuwait
E-mail: reyadh.faras@ku.edu.kw
ORCID: 0000-0001-5021-9199

Wael Alshuwaiee, College of Business Studies, Kuwait

Wael Alshuwaiee, PhD
Associate Professor
Department of Economics
College of Business Studies, Kuwait
Public Authority for Applied Education and Training
E-mail: wm.alshuwaiee@paaet.edu.kw
ORCID: 0000-0002-3473-0090