Impact of remittance inflow on Nepalese economy / Manisha Acharya 

Public ISBD Title : Impact of remittance inflow on Nepalese economy Material Type: printed text Authors: Manisha Acharya, Author Publication Date: 2018 Pagination: 90p. Size: GRP/Thesis Accompanying material: 10/B Languages : English Descriptors: Remittance Class number: 332.4508 Abstract: In a general term, remittance is money transferred by migrant workers or remitters from host countries to their home countries to support their families. Remittance also refers to the concept of a monetary payment transferred by a customer to a business from one place to another (Mafruhah et al., 2012). Based on its size and impact on the world economic system, it is considered as one of the major sources of incomes. Remittance inflows works as a facilitator for achieving sustained economic growth. Many developing countries like Nepal are becoming more progressively reliant on remittances as it has played an important role to uphold economic growth and development in these countries. Remittance allows workers to support their families and relatives during financial crisis and natural calamities (Orozco &Fedewa, 2006). Buch & Kuckulenz (2010) found that remittances are positively related to welfare enhancing effect, such as capital investment, consumption, education and health. Inflow of remittances affects economic growth positively by reducing current account deficit, improving the balance of payment position and reducing dependence on external borrowing (Iqbal & Sattar, 2005). In the context of Nepal, Pradhan et al. (2008) found that remittance and economic growth are directly associated with each other. Moreover, Gaudel (2006) pointed out remittance as a major source of foreign currency to the developing nation and it has become a substantial component of making current account surplus in the balance of payments. Thus, the study further elaborated that remittance is typically helpful to meet specific needs of the respondents’ family members and thus tend to increase their standard of living. The major purpose of this study is to investigate the impact of remittance inflows on Nepalese economy. Specifically, it examines the impact of total remittance inflows ,Broad money supply, import,foreign aid and capital formation and on the economy of Nepal. The results in the prior studies on foreign remittances and economic growth of a nation are mixed and unclear. Hence, this study has been conducted to get clear idea of the impact of remittance inflows on the economic growth in the context of Nepal. This study is based on secondary sources of data that are collected from1994/95 to 2015/16, leading to a total of 22 observations. The data are collected from the reports published by World Bank, different issues of Economic Survey published by Ministry of Finance and Quarterly Economic Bulletin published by Nepal Rastra Bank. The study has used GDP and per capita income as dependent variables and total remittance inflows, Broad money supply, capital formation, import and foreign aid as independent variables. Likewise, the study relies on descriptive and causal comparative research designs. The study shows that the total remittance inflows, Broad money supply, import, capital formation and foreign aid have positive relationship with the gross domestic product. It indicates that increase in total remittance inflows and foreign aid leads to increase in gross domestic product. Likewise, increase in Broad money supply, import and capital formation leads to increase in gross domestic product. Similarly, the result shows that total remittance inflows, Broad money supply, import, capital formation and foreign aid have positive relationship with the per capita income. It indicates that increase in total remittance inflows, Broad money supply and import leads to increase in per capita income. Similarly, increase in capital formation and foreign aid leads to increase in per capita income. The regression results show that the beta coefficients for total remittance inflows and foreign aid are positive with per capita income. Likewise, the beta coefficients for capital formation and foreign aid are positive with gross domestic product. The study concludes that remittance is the significant source of GDP and PCI. The recommendation put forward by this study is that in order to achieve higher and better economic growth, the country should increase the total remittance inflows and use them more effectively in a productive sector. At the same time, foreign aid, capital information, import and Broad money supply, should also be increased which will result into higher economic growth of the nation. The major limitation of this study is that this study has excluded some bank macroeconomic variables that might influence on performance evaluation of banks. The study remains enough ground for future researcher in the same topic. The future studies can be carried out by selecting other different macroeconomic variables to grab the wider view of impact of remittances. Impact of remittance inflow on Nepalese economy [printed text] / Manisha Acharya, Author . - 2018 . - 90p. ; GRP/Thesis + 10/B. Languages : English Descriptors: Remittance Class number: 332.4508 Abstract: In a general term, remittance is money transferred by migrant workers or remitters from host countries to their home countries to support their families. Remittance also refers to the concept of a monetary payment transferred by a customer to a business from one place to another (Mafruhah et al., 2012). Based on its size and impact on the world economic system, it is considered as one of the major sources of incomes. Remittance inflows works as a facilitator for achieving sustained economic growth. Many developing countries like Nepal are becoming more progressively reliant on remittances as it has played an important role to uphold economic growth and development in these countries. Remittance allows workers to support their families and relatives during financial crisis and natural calamities (Orozco &Fedewa, 2006). Buch & Kuckulenz (2010) found that remittances are positively related to welfare enhancing effect, such as capital investment, consumption, education and health. Inflow of remittances affects economic growth positively by reducing current account deficit, improving the balance of payment position and reducing dependence on external borrowing (Iqbal & Sattar, 2005). In the context of Nepal, Pradhan et al. (2008) found that remittance and economic growth are directly associated with each other. Moreover, Gaudel (2006) pointed out remittance as a major source of foreign currency to the developing nation and it has become a substantial component of making current account surplus in the balance of payments. Thus, the study further elaborated that remittance is typically helpful to meet specific needs of the respondents’ family members and thus tend to increase their standard of living. The major purpose of this study is to investigate the impact of remittance inflows on Nepalese economy. Specifically, it examines the impact of total remittance inflows ,Broad money supply, import,foreign aid and capital formation and on the economy of Nepal. The results in the prior studies on foreign remittances and economic growth of a nation are mixed and unclear. Hence, this study has been conducted to get clear idea of the impact of remittance inflows on the economic growth in the context of Nepal. This study is based on secondary sources of data that are collected from1994/95 to 2015/16, leading to a total of 22 observations. The data are collected from the reports published by World Bank, different issues of Economic Survey published by Ministry of Finance and Quarterly Economic Bulletin published by Nepal Rastra Bank. The study has used GDP and per capita income as dependent variables and total remittance inflows, Broad money supply, capital formation, import and foreign aid as independent variables. Likewise, the study relies on descriptive and causal comparative research designs. The study shows that the total remittance inflows, Broad money supply, import, capital formation and foreign aid have positive relationship with the gross domestic product. It indicates that increase in total remittance inflows and foreign aid leads to increase in gross domestic product. Likewise, increase in Broad money supply, import and capital formation leads to increase in gross domestic product. Similarly, the result shows that total remittance inflows, Broad money supply, import, capital formation and foreign aid have positive relationship with the per capita income. It indicates that increase in total remittance inflows, Broad money supply and import leads to increase in per capita income. Similarly, increase in capital formation and foreign aid leads to increase in per capita income. The regression results show that the beta coefficients for total remittance inflows and foreign aid are positive with per capita income. Likewise, the beta coefficients for capital formation and foreign aid are positive with gross domestic product. The study concludes that remittance is the significant source of GDP and PCI. The recommendation put forward by this study is that in order to achieve higher and better economic growth, the country should increase the total remittance inflows and use them more effectively in a productive sector. At the same time, foreign aid, capital information, import and Broad money supply, should also be increased which will result into higher economic growth of the nation. The major limitation of this study is that this study has excluded some bank macroeconomic variables that might influence on performance evaluation of banks. The study remains enough ground for future researcher in the same topic. The future studies can be carried out by selecting other different macroeconomic variables to grab the wider view of impact of remittances.

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Impact of remittance on economic growth and poverty alleviation in Nepal / Yegya Bahadur K.C 

Public ISBD Title : Impact of remittance on economic growth and poverty alleviation in Nepal Material Type: printed text Authors: Yegya Bahadur K.C, Author Publication Date: 2017 Pagination: 90p. Size: GRP/Thesis Accompanying material: 10/B Languages : English Descriptors: Remittance Class number: 332.042 Abstract: Remittance is a transfer of money by foreign worker to his or her home country. Remittance can also be referred as monetary payment transferred by a customer to a business from one place to another (Mafruhah et al., 2012). In the worldwide economy, remittances represent one of the major international flows of financial resources. Worker remittances constitute an increasingly important mechanism for the transfer of resources from developed to developing countries, and remittances are the second-largest source, behind foreign direct investment, of external funding for developing countries. Sometimes the flows of remittances can exceed the flows of foreign direct investment (Shera & Meyer, 2013). Inflows of remittances increase the economic growth and reduce the poverty by stimulating the income of the recipient country, reducing credit constraints, accelerating investment and enhancing human development through financing better education and health (Jongwanich (2007); Gupta etal.(2009). However, Chami et al. (2005) found that remittances have negative impacts on economic growth of recipient country because a significant flow of remittances reduce labor force participation and work efforts which lowers output. Thus, the impact of remittances on economic growth and development of recipient country has been controversial. According to ArefAssaf (2015), there is a positive effect of remittances on GDP. On the other hand the effects of other traditional sources of economic growth, such as gross fixed capital formation showed that there is a positive effect on GDP, a negative effect of foreign direct investment on GDP, while no significant effect of labor force on GDP. Similarly, Faini (2002) argued that remittances overcome capital market imperfections and allow migrant households to accumulate positive assets. Glytsos (1993) examined the impact of remittances on output using data from 1969 to 1998 for Egypt, Greece, Jordan, Morocco, and Portugal. For Egypt, Jordan, and Morocco the growth-generating capacity of rising remittances characteristic is smaller than the growth-destroying capacity of falling remittances. Therefore, the large fluctuations in the real value of remittances contribute to large fluctuations of output growth and cause instability in the economies concerned. Kaufmann et al. (2004) found a robust positive relationship between growth and gross capital formation, as well as between growth and some of the institutional variables. The study also found some evidence of a positive relationship between growth and total remittances. Similarly, Azam & Khan (2011) found that worker remittance has significant and positive effects on economic growth. Javidet al. (2012) investigated the importance of remittances inflow and its implication for economic growth and poverty reduction in Pakistan. By using ARDL approach, the study analyzed the impact of remittances inflow on economic growth and poverty in Pakistan for the period 1973-2010. The empirical evidence showed that remittances effect economic growth positively and significantly. Furthermore, the study also found that remittances have a strong and statistically significant impact on poverty reduction. Similarly, Giuliano (2008) found that remittances boost growth in countries with less developed financial system as it provides an alternative way to finance investment and reduce liquidity constraints. Workers’ remittances also play an important role in human capital investment in the recipient country through relaxing resource constraints. Rajan &Subramanian (2005) found a robust and significant positive effect of remittance on long-term growth. Jongwanich (2007) examined the impact of workers’ remittances on growth and poverty in Asia-Pacific developing countries. The empirical evidence showed that remittances have a significant impact on poverty reduction and trivial impact on growth. Similarly, Burgess and Vikram (2005) examined the different channels through which remittances can affect economic activity. The study does not clearly support the short term stabilizing effect on consumption, however the longer term economic effect of such flows seems to be ambiguous. Catrinescu et al. (2009) explored that remittances exert a weak positive impact on long term macroeconomic growth. Furthermore, the study also supported the idea that development impact of remittance enhances in the presence of sound macroeconomic policies and institution. The majorobjective of the study is to examine the impact of remittance on economic growth and poverty alleviation in Nepal.The study is based on the secondary data, which were gathered from 1995/96 to 2014/15, leading to a total of 20 observations. The main sources of data are Economic Survey, Monetary Policy and different reports published by NRB, reports published by World Bank, and different issues and reports published by Ministry of Finance. The correlation analysis shows that gross domestic product is positively correlated to total remittances inflow, broad money supply, foreign aid, industrial production, inflation and foreign direct investment. Similarly, poverty alleviation is positively correlated with total remittance inflow, per capita income, consumption and literacy rate but is negatively correlated to unemployment rate. The regression results for gross domestic product shows that a beta coefficient is positive for total remittance inflow, broad money supply, foreign aid, industrial production, inflation and foreign direct investment. The result indicates that higher the total remittance inflow, broad money supply, foreign aid, industrial production, inflation and foreign direct investment, higher would be gross domestic product. Similarly, the regression results for poverty alleviation show that the beta coefficient is negative for unemployment rate. Thus, the result indicates that higher the unemployment rate, lower would be the poverty alleviation. The beta coefficients are positive for total remittance inflow, per capita income, consumption and literacy rate. The result hence indicates that higher the per capita income, higher would be the poverty alleviation. Similarly, higher the consumption, higher would be the poverty alleviation. The result also shows that higher the literacy rate, higher would be the poverty reduction. Impact of remittance on economic growth and poverty alleviation in Nepal [printed text] / Yegya Bahadur K.C, Author . - 2017 . - 90p. ; GRP/Thesis + 10/B. Languages : English Descriptors: Remittance Class number: 332.042 Abstract: Remittance is a transfer of money by foreign worker to his or her home country. Remittance can also be referred as monetary payment transferred by a customer to a business from one place to another (Mafruhah et al., 2012). In the worldwide economy, remittances represent one of the major international flows of financial resources. Worker remittances constitute an increasingly important mechanism for the transfer of resources from developed to developing countries, and remittances are the second-largest source, behind foreign direct investment, of external funding for developing countries. Sometimes the flows of remittances can exceed the flows of foreign direct investment (Shera & Meyer, 2013). Inflows of remittances increase the economic growth and reduce the poverty by stimulating the income of the recipient country, reducing credit constraints, accelerating investment and enhancing human development through financing better education and health (Jongwanich (2007); Gupta etal.(2009). However, Chami et al. (2005) found that remittances have negative impacts on economic growth of recipient country because a significant flow of remittances reduce labor force participation and work efforts which lowers output. Thus, the impact of remittances on economic growth and development of recipient country has been controversial. According to ArefAssaf (2015), there is a positive effect of remittances on GDP. On the other hand the effects of other traditional sources of economic growth, such as gross fixed capital formation showed that there is a positive effect on GDP, a negative effect of foreign direct investment on GDP, while no significant effect of labor force on GDP. Similarly, Faini (2002) argued that remittances overcome capital market imperfections and allow migrant households to accumulate positive assets. Glytsos (1993) examined the impact of remittances on output using data from 1969 to 1998 for Egypt, Greece, Jordan, Morocco, and Portugal. For Egypt, Jordan, and Morocco the growth-generating capacity of rising remittances characteristic is smaller than the growth-destroying capacity of falling remittances. Therefore, the large fluctuations in the real value of remittances contribute to large fluctuations of output growth and cause instability in the economies concerned. Kaufmann et al. (2004) found a robust positive relationship between growth and gross capital formation, as well as between growth and some of the institutional variables. The study also found some evidence of a positive relationship between growth and total remittances. Similarly, Azam & Khan (2011) found that worker remittance has significant and positive effects on economic growth. Javidet al. (2012) investigated the importance of remittances inflow and its implication for economic growth and poverty reduction in Pakistan. By using ARDL approach, the study analyzed the impact of remittances inflow on economic growth and poverty in Pakistan for the period 1973-2010. The empirical evidence showed that remittances effect economic growth positively and significantly. Furthermore, the study also found that remittances have a strong and statistically significant impact on poverty reduction. Similarly, Giuliano (2008) found that remittances boost growth in countries with less developed financial system as it provides an alternative way to finance investment and reduce liquidity constraints. Workers’ remittances also play an important role in human capital investment in the recipient country through relaxing resource constraints. Rajan &Subramanian (2005) found a robust and significant positive effect of remittance on long-term growth. Jongwanich (2007) examined the impact of workers’ remittances on growth and poverty in Asia-Pacific developing countries. The empirical evidence showed that remittances have a significant impact on poverty reduction and trivial impact on growth. Similarly, Burgess and Vikram (2005) examined the different channels through which remittances can affect economic activity. The study does not clearly support the short term stabilizing effect on consumption, however the longer term economic effect of such flows seems to be ambiguous. Catrinescu et al. (2009) explored that remittances exert a weak positive impact on long term macroeconomic growth. Furthermore, the study also supported the idea that development impact of remittance enhances in the presence of sound macroeconomic policies and institution. The majorobjective of the study is to examine the impact of remittance on economic growth and poverty alleviation in Nepal.The study is based on the secondary data, which were gathered from 1995/96 to 2014/15, leading to a total of 20 observations. The main sources of data are Economic Survey, Monetary Policy and different reports published by NRB, reports published by World Bank, and different issues and reports published by Ministry of Finance. The correlation analysis shows that gross domestic product is positively correlated to total remittances inflow, broad money supply, foreign aid, industrial production, inflation and foreign direct investment. Similarly, poverty alleviation is positively correlated with total remittance inflow, per capita income, consumption and literacy rate but is negatively correlated to unemployment rate. The regression results for gross domestic product shows that a beta coefficient is positive for total remittance inflow, broad money supply, foreign aid, industrial production, inflation and foreign direct investment. The result indicates that higher the total remittance inflow, broad money supply, foreign aid, industrial production, inflation and foreign direct investment, higher would be gross domestic product. Similarly, the regression results for poverty alleviation show that the beta coefficient is negative for unemployment rate. Thus, the result indicates that higher the unemployment rate, lower would be the poverty alleviation. The beta coefficients are positive for total remittance inflow, per capita income, consumption and literacy rate. The result hence indicates that higher the per capita income, higher would be the poverty alleviation. Similarly, higher the consumption, higher would be the poverty alleviation. The result also shows that higher the literacy rate, higher would be the poverty reduction.

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