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I would like to thank Klakow Akepanidtaworn, Ezequiel Cabezon, Ralph Chami, Lawrence Dwight, Annette Kyobe, Subir Lall, Nathan Porter, and Manmohan Singh for helpful comments and suggestions. Liliya Nigmatullina provided excellent production assistance. The usual disclaimer applies.
According to the World Bank’s Migration and Development Brief 32 (April, 2020), remittance flows to low and middle-income countries will fall by 20 percent in 2020 reflecting the impact of the COVID-19.
According to Newton’s Law of Universal Gravitation, any two particles attract each other thanks to a force that is directly proportional to the product of their masses and inversely proportional to the square of the distance between them (Yotov and others, 2016). Applied to bilateral remittances, Newton’s Law of Gravity implies that countries exchange remittances in proportion to their respective economic size (e.g. gross domestic products) and proximity.
The sample includes Armenia, Azerbaijan, Georgia, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. The time period is limited to 2010–17 due to availability of data on bilateral remittances.
This result differs from that of Le Golf and Salomone (2015), who find a positive coefficient on the share of female migrants variable in a sample of 89 sending and 46 receiving countries over the period 1985–2005.
This is consistent with Barajas and others (2012) and IMF (2012). These studies also find that business cycle synchronization between home and host countries increases with the volume of remittance flows.
Replacing the level of oil prices with their changes leads to qualitatively similar results.
Indeed, when Russia is excluded from the sample, the coefficient of oil prices becomes positive and significant in a ll specifications (results a vailable upon request). This suggests that oil prices have indirect association with remittance flows through their impact on the Russian economy.