Policy Pushes, Prices, and People: Unveiling Drivers of Global Remittance Inflows

Imran Khan ()
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Imran Khan: Birla Institute of Technology and Science

Journal of the Knowledge Economy, 2025, vol. 16, issue 3, No 39, 12118-12142

Abstract: Abstract This research investigates the complex interplay of global migration, international economic trends, and domestic governance on remittance inflows to India. The aim is to provide a comprehensive understanding of the factors shaping this crucial source of external finance. Employing a robust time series dataset spanning 1996 to 2022, the study utilizes the autoregressive distributed lag (ARDL) model to analyze the short- and long-run influences of various factors. These include the effectiveness of government policies, the strength of the rule of law, foreign exchange rates, consumer price fluctuations, and migration trends. The analysis reveals that the effectiveness of government policies, outward migration from India, and consumer price levels significantly impact remittance inflows in both the short and long term. Interestingly, the study finds no statistically significant relationship between remittance inflows and exchange rates or the rule of law. This research contributes significantly to the existing literature on remittances in several ways. Firstly, it highlights the previously underexplored role of effective government policies in shaping remittance flows to India. Identifying specific policies that attract remittances empowers policymakers to design targeted interventions that bolster the country’s economic well-being. Secondly, the study aligns with the growing global trend of migration by emphasizing its crucial influence on remittance inflows. Understanding this dynamic can inform policy strategies that leverage the positive economic impact of migration through remittances, fostering further growth and development. Finally, the research sheds light on the impact of consumer prices, establishing a clear link between economic conditions and remittance trends in both the short and long term. This knowledge can be harnessed to implement measures aimed at stabilizing consumer prices, ultimately creating a more robust remittance environment for India.

Keywords: Remittance; India; Government policies; Rule of law; Migration; Exchange rate; Consumer prices (search for similar items in EconPapers)
JEL-codes: F22 F24 H11 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s13132-024-02456-0

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