 Transaction costs and recorded remittances in the post-Soviet economies: Evidence from a new dataset on bilateral flowsJakhongir Kakhkharov, Alexandr Akimov and Nicholas Rohde Economic Modelling, 2017, vol. 60, issue C, 98-107 Abstract: Labour migrants' remittances are a rapidly growing phenomenon in the countries of the former Soviet Union. The size and growth of remittances in the countries of the recipients brought the issue under the scrutiny of researchers and policymakers. In this paper we investigate the main factors behind the growing volume of remittances in the post-Soviet space. By applying panel data techniques we found that a reduction in transaction costs and a depreciation of the currency in the host country were the main factors that influenced the growth of recorded remittances. The size of transaction costs remains a significant predictor of the volume of formal remittances, even after correcting for endogeneity using an instrumental variable estimator. The inverse relationship between transaction costs and recorded remittances suggests that migrants switch from informal channels to formal channels to send remittances when costs are low. Thus lower transaction costs may help curb the proportion of informal flows and lead to increased use of remittances in the formal economy. Keywords: Remittances; Migration; Money transfer fees; Transition; Post-communist (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:60:y:2017:i:c:p:98-107 DOI: 10.1016/j.econmod.2016.09.011 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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