Published Online:August 2024
Product Name:The IUP Journal of Bank Management
Product Type:Article
Product Code:
Author Name:Manbhanjan Mishra and Hansa Jain
Availability:YES
Subject/Domain:Finance
Download Format:PDF
Pages:29
Migration and private remittances have been continuously increasing over the years. For many developing countries, the quantum of remittances is greater than other forms of capital, such as FDI, FII, etc. The remittances may be used to fill the gap in potential funding sources for economic development in emerging countries like India. Migrations from India to the United States (US) and the flow of remittances to India have been continuously increasing over the years. The paper studies the macroeconomic factors influencing remittances to India. The study employs ARDL technique to identify the macroeconomic factors such as GDP, term premium, CPI, etc. of US, in addition to the domestic factors of India and price of Brent and other commodities such as gold, silver, and platinum that influence the flow of remittances to India. Further, the study also employs NARDL techniques to identify the asymmetric impact of macroeconomic variables in US on remittance flows to India. CDM technique is also used to decipher the shock evolution of independent variables with regard to remittance flows to India.
Globalization and economic integration are leading to an increase in migration across the world. As per the United Nations Department of Economics and Social Affairs (UNDESA) data, international migrants were estimated to be 272 million in 2019, which was 4.9% of the total labor force worldwide. The trend of international migration indicated that around 67.4% of the migration was to high-income countries, 19.5% to upper middle-income countries, and around 9.5% migrated to low-income countries. The economic rationale of migration can be assigned to Heckscher-Ohlin Principle, which explains that factors of production (capital and labor) flow towards those countries where factor prices are high until they are equalized due to free trade.