How Does the Flow of Remittances Affect the Trade Balance of the Middle East and North Africa?

Mohammad Reza Farzanegan & Sherif Maher Hassan (2019) How does the flow of remittances affect the trade balance of the Middle East and North Africa?, Journal of Economic Policy Reform, DOI: 10.1080/17487870.2019.1609357

Posted: 3 Jun 2019

See all articles by Mohammad Reza Farzanegan

Mohammad Reza Farzanegan

University of Marburg - Center for Near and Middle Eastern Studies (CNMS)

Sherif Maher Hassan

Suez Canal University - Faculty of Commerce; The British University in Egypt - Faculty of Business Administration, Economics, and Political Science

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Date Written: May 11, 2019

Abstract

The Middle Eastern and North African (MENA) economies have one of the highest degrees of dependency on received remittances worldwide. In this study, we have examined the role of remittances in the trade balance of 11 labour abundant MENA countries. Our panel regression analysis showed that the inflow of remittances has fostered the trade deficit. We also found that the final effect of remittances depends on the level of domestic capital formation. The results are robust after controlling for other drivers of trade deficit such as income, inflation, exchange rate and institutions as well as country and year fixed effects.

Keywords: Remittances, Middle East and North Africa, trade balance, panel fixed effects

JEL Classification: C23, F22, F14

Suggested Citation

Farzanegan, Mohammad Reza and Hassan, Sherif Maher, How Does the Flow of Remittances Affect the Trade Balance of the Middle East and North Africa? (May 11, 2019). Mohammad Reza Farzanegan & Sherif Maher Hassan (2019) How does the flow of remittances affect the trade balance of the Middle East and North Africa?, Journal of Economic Policy Reform, DOI: 10.1080/17487870.2019.1609357, Available at SSRN: https://ssrn.com/abstract=3386471

Mohammad Reza Farzanegan

University of Marburg - Center for Near and Middle Eastern Studies (CNMS) ( email )

Deutschhausstra├če 12
Marburg, 35037
Germany

HOME PAGE: http://www.uni-marburg.de/cnms/wirtschaft

Sherif Maher Hassan (Contact Author)

Suez Canal University - Faculty of Commerce

Ismailia
Egypt

HOME PAGE: http://foc.scuegypt.edu.eg/?page=pages&page_id=9

The British University in Egypt - Faculty of Business Administration, Economics, and Political Science ( email )

Egypt

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