Remittances and Vulnerability in Developing Countries

Giulia Bettin, Andrea Presbitero and Nikola Spatafora

The World Bank Economic Review, 2017, vol. 31, issue 1, 1-23

Abstract: This paper examines how international remittances are affected by structural characteristics, macroeconomic conditions, and adverse shocks in recipient economies. We exploit a novel, rich panel data set, covering bilateral remittances from 103 Italian provinces to seventy-nine developing countries over the period 2005–2011. We find that remittances are negatively correlated with the business cycle in recipient countries and in particular increase in response to adverse exogenous shocks, such as large terms-of-trade declines. This effect is stronger where the migrant communities have a larger share of newly arrived migrants. Finally, we show that recipient-country financial development is negatively associated with remittances, suggesting that remittances help alleviate credit constraints.

Keywords: Remittances; Shocks; Business Cycles; Vulnerability (search for similar items in EconPapers)
JEL-codes: F33 F34 F35 O11 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (21)

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Related works:
Working Paper: Remittances and vulnerability in developing countries (2014)
Working Paper: Remittances and Vulnerability in Developing Countries (2014)
Working Paper: Remittances and vulnerability in developing countries (2014)
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