Please use this identifier to cite or link to this item: https://www.um.edu.mt/library/oar/handle/123456789/40548
Title: Diaspora remittances and investment : a derivation and measurement
Authors: Hunte, Kenrick C.
Keywords: Investments -- Case studies
Economic development -- Case studies
Commonwealth countries -- Economic conditions
Policy sciences -- Case studies
Issue Date: 2012
Publisher: University of Malta. Islands and Small States Institute
Citation: Hunte, C. K. (2012). Diaspora remittances and investment: a derivation and measurement. Occasional Papers on Islands and Small States, 6, 1-20.
Abstract: This paper provides a theoretical framework and empirical evidence for assessing the impact remittances have on investment, saving, the interest and exchange rates in a small, open economy. The model shows that remittance inflows result in a currency that appreciates as the interest rate decreases, while the evidence confirms that remittances have a positive impact on investment. A poor business environment, the lack of corruption control and the absence of the rule of law can decrease investment. Commonwealth countries have a propensity to save and invest at relatively higher levels than other countries in the study; and political stability and the rule of law enhance this process. Remittances, however, reduce savings, making the country more remittance-dependent. Policy makers should therefore provide incentives that increase the use of remittances in investments that emphasize employment opportunities, and offer attractive medium and long term saving instruments to forestall the impact of a currency-appreciation.
URI: https://www.um.edu.mt/library/oar//handle/123456789/40548
ISSN: 10246282
Appears in Collections:Scholarly Works - InsSSI

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