Mazhar Mughal

Remittances and Business Cycles: Comparison of South Asian Countries

ABSTRACT South Asia is one of the worlds principal remittance-receiving regions. This study examines the home and host business cycles of migrant remittance flows to the region. Employing the Structural Vector Autoregression (SVAR) technique, the remittance behaviour of the regions four main countries is compared. Remittances to India and Pakistan show a mainly acyclical behaviour with respect to the output of the four host regions, and a countercyclical behaviour with respect to home output. In contrast, remittances to the two smaller economies of Bangladesh and Sri Lanka are found to be mainly procyclical. The study shows that the macroeconomic remittance behaviour varies with respect to the importance of remittance flows in the home economy. Moreover, remittance behaviour seems to respond more to home economy specificities than to those of the different regions that host the migrants from the developing countries.

Do Migrant Remittances React to Bouts of Terrorism

This paper examines the short-run behaviour of migrant remittances in the face of terrorism. Using monthly data for post 9/11 terrorist attacks in Pakistan, the study finds evidence of increase in the volume of remittances sent from abroad. This increase is evident in the aggregate, as well as for the three main source regions of North America, the Persian Gulf and Europe. The positive association holds for all the top five migrant-hosting countries of Pakistan. The findings point in favour of an altruistic behaviour of migrant remittances at the macroeconomic level.

Labour effects of foreign and domestic remittances -- evidence from Pakistan

Remittances are playing an increasingly important role in the economies of developing countries. In this paper, we study the effects of these flows on Pakistan’s labour market. We employ the 2007–2008 Household Integrated Economic Survey and Probit as well as Propensity Score Matching techniques to examine the impact on labour participation, quantity of work and activities of working as well as non-active members of remittance-receiving households. We find that both foreign and domestic remittances tend to lower labour supply of the recipient households. This impact is higher among women and among the young. The impact is more pronounced in the rural areas. In addition, foreign remittances increase the likelihood of household members attending middle school. We also examine the quantity of labour supplied by the remittance-recipient households. Results show little difference in the number of months and days worked between the households receiving and not receiving remittances. Furthermore, we find that the likelihood of being self-employed and cultivating one’s own land is higher among remittance recipients. In sum, our analysis highlights a higher role of foreign remittances in the labour market as compared to internal remittances.

Migrant remittances and fertility

ABSTRACT This study examines the role of migrants’ remittances in developing countries’ fertility transition. Employing an unbalanced panel of South Asian countries and controlling for various economic and socio-demographic factors, we find that remittances are significantly associated with a lower number of children born to women of childbearing age. This suggests the remittances’ substitution effect to be at play rather than the income effect, and may result from decreased need for children for financing the household’s future needs as well as from better access to healthcare and contraceptive methods available to migrant households. Remittances’ association with fertility appears to be more important than the transfer of fertility norms from migrants’ host countries. The monetary aspects of international migration may therefore be more important for the region’s demographic transition than social remittances.

Out of Africa? Locational determinants of South African cross-border mergers and acquisitions

ABSTRACT South Africa is the Africa’s biggest source of outward foreign direct investment. This study examines the principal locational motives of cross-border mergers and acquisitions CBMA by South African firms for the 1990–2014 period. The role of inter-country cultural and economic linkages is also studied. Firm-level data of South African merger and acquisition activities in 74 host countries are used to estimate a number of model specifications that control for host-country economic, geographical, cultural and institutional characteristics. Estimations are carried out using random-effects negative binomial panel model. Capturing the host-economy market and enhancing efficiency are found to be the two major motives driving South African corporations’ CBMA activities. Natural resources acquisition seems a less important motive, while strategic assets such as patents and technology do not appear to be attractive. The role of cultural and economic linkages between the home and the host country is found to be substantial. South African firms prefer investing in Africa, particularly in countries bordering South Africa. In light of the study’s findings, South African CBMA activities can be compared with those from other emerging economies.

How Do Migrant Remittances Affect Household Consumption Patterns

This study analyzes differential consumption patterns of Pakistani migrant households resulting from foreign and domestic remittances. Using the Working-Leser model and a number of matching techniques, we analyze a large representative household survey carried out in 2010-2011 to compare various expenditure categories of recipient and non-recipient households across different income brackets. Findings show that foreign remittances lead to significant consumption changes. Contrary to the widely-held view, remittances do not raise the budget share on consumer goods and recreation, while the allocation on education increases substantially. Households receiving domestic remittances also show a strong focus on human capital with significantly higher shares of health and education. Recipients of international transfers living below one dollar a day spend proportionally more on food compared with their non-recipient counterparts, whereas their education and health budget shares are not dissimilar. We find that migrant households perceive remittances as a mainly transient, not fully fungible source of income.

Fertility Responses to Migrant Remittances in Pakistan

Migration and fertility are two of the main components of demographic dynamics. Both are individual or household-level responses to the chang- ing economic conditions that occur in urbanization industrialization, and higher returns to human capital accumulation. Migration is often in itself a household’s strategic response to the economic difficulties that high fertil- ity generates in an economy undergoing a transition. The two phenomena are thus closely associated, and hold a special significance in developing countries that experience demographic evolution from high-birth, high- mortality societies to low-fertility, low-mortality ones. In the developing countries, poor and irregular provision of healthcare and low penetration of the financial system means that migration can prove as a reliable strategy to cover risks related to household income and consumption (Massey et al., 1993). In particular, given its higher earning potential, international migra- tion can therefore be a means to better household health outcomes.