Impact of Geopolitical Risk on Foreign Remittances

38 Pages Posted: 9 Dec 2019

Date Written: November 22, 2019

Abstract

This study seeks to examine the hidden-cointegration among Geopolitical Risk (GPR) and foreign remittances. The suitable models for this study are Nonlinear Autoregressive Distributed Lag (NARDL) model to find the nature of impact (symmetric or asymmetric), and Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model to examine the volatility of foreign remittances using data for BRIC economies. The findings from NARDL suggests that in short-run geopolitical risk is asymmetric to foreign remittances in BRIC economies. Whereas, in long-run geopolitical risk is asymmetric to foreign remittances in the case of Brazil, Russia and India. We find volatility in GPR transmits to volatility in foreign remittances in the case of Brazil, Russia, and India. Remittances in China are found to be least volatile during geopolitical risk. The policymakers, migrants, and recipients should consider the asymmetric and volatile nature of geopolitical risk while making decisions about policies and transfer of remittances respectively.

Keywords: Geopolitical risk, foreign remittances, NARDL, GARCH

JEL Classification: A10, C13, G28

Suggested Citation

Oad Rajput, Suresh Kumar and Bajaj, Namarta and Siyal, Tariq, Impact of Geopolitical Risk on Foreign Remittances (November 22, 2019). Available at SSRN: https://ssrn.com/abstract=3491587 or http://dx.doi.org/10.2139/ssrn.3491587

Suresh Kumar Oad Rajput (Contact Author)

Sukkur IBA University ( email )

SUKKUR IBA UNIVERSITY
SUKKUR, SINDH 65200
Pakistan
00923363322855 (Phone)
65200 (Fax)

Namarta Bajaj

Sukkur IBA University ( email )

Sukkur Iba University
Sukkur, Sindh 56200
Pakistan

Tariq Siyal

Sukkur IBA University ( email )

Sukkur Iba University
Sukkur, Sindh 56200
Pakistan

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
42
Abstract Views
299
PlumX Metrics