Academic Scientific JournalsThe nexus between social unrest and migrant remittances: empirical evidence from Georgia
Keywords:
Social Unrest, Remittances, Migration, Georgia, Granger CausalityAbstract
The paper examines the social unrest and migrant remittances relationship for Georgia using monthly time series data covering January 2007– July 2019. The Granger Causality Test was employed in the application of the econometric technique. Frequency domain causality test was also used in order to empower the findings of the study. The empirical findings showed that there is a bidirectional causality between the reported social unrest index (RSUI) and the remittance inflow to Georgia. Besides, frequency domain causality test results indicated that RSUI was the Granger cause of remittance inflow in the medium term (7-10 months), while remittance inflow was the Granger cause of RSUI in the short term (2-6 months). Social unrest comprises protests based on basic economic needs such as food, gas, electricity etc. Therefore, social unrest can be a supportive factor of remittances inflow to Georgia. This is in line with the view that remittances sent by Georgian immigrants to their families in Georgia are used for consumption rather than investments. On the other hand, remittances can be a determinant of social unrest for Georgia because the existence of separatist movements in Abkhazia and former South Ossetia can be interpreted as remittances can be an important source to fund these movements.
Downloads
References
Abbas, F., Masood, A., Sakhawat, A., (2017), What determine remittances to Pakistan? The role of macroeconomic, political and financial factors. Journal of Policy Modelling, 39, 519-531.
Amuedo-Dorantes, C., (2014), The good and the bad in remittance flows. IZA World of Labor, November 2014, 1-10.
Amuedo-Dorantes, C., Pozo, S., (2004), Workers’ remittances and the real exchange rate: a paradox of gifts. World Development, 32(8), 1407-1417.
Andrews, D., Zivot, E., (1992), Further evidence on the Great Crash, the oil price shock, and the unit-root hypothesis. Journal of Business and Economic Statistics 10, 251-70.
Ari, Y. O., Bello, I., (2020). Terrorism-workers’ remittances nexus: empirical evidence from Turkey, Eastern Journal of European Studies, 11(2), 70-93.
Bahadır, B., Chatterjee, S., Lebesmuehlbacher, T., (2018), The macroeconomic consequences of remittances, Journal of International Economics, 111, 214-232.
Barajas, A., Gapen, M.T., Chami, R., Montiel, P., Fullenkamp, C., (2009), Do workers’ remittances promote economic growth? IMF Working Paper 09/153. International Monetary Fund, Washington, DC.
Barrett, P., Appendino, M., Nguyen, K., & Miranda, J. L., (2020), Measuring social unrest using media reports. IMF Working Paper.
Batu, M., (2019), Can remittances buy peace?. Economics of Transition and Institutional Change, 27(4), 891-913.
Bayar, Y., (2015), Impact of remittances on the economic growth in the transitional economies of the European Union. Economic Insights-Trends and Challenges, Vol. 4, No. 3, 1-10.
Beraia, E., (2021), Migration problems at the regional security level: Reasons for Georgian migration abroad. Bialystok Legal Studies, 26(1), 117-129.
Breitung, J., & Candelon, B. (2006). Testing for short-and long-run causality: A frequency-domain approach. Journal of Econometrics, 132(2), 363-378.
Chami, R., Fullenkamp, C., Jahjah, S. (2003), Are Immigrant Remittance Flows a Source of Capital for Development? International Monetary Fund Working Paper No. WP/03/189.
Çevik, E. İ., Atukeren, E., & Korkmaz, T. (2019). Trade openness and economic growth in Turkey: a rolling frequency domain analysis. Economies, 7(2), 41.
De Haas, H., (2007), Remittances, migration and social development: a conceptual review of the literature. Social Policy and Development Programme Paper, Number 34, October 2007.
Dickey, D. A., Fuller, W. A. (1979), Distribution of the estimators for autoregressive time series with a unit root. Journal of the American statistical association, 74(366a), 427-431.
Dickey, D. A., Fuller, W. A. (1981), Likelihood ratio statistics for autoregressive time series with a unit root. Econometrica: journal of the Econometric Society, 1057-1072.
Docquier, F., Rapaport, H., (1998), Are migrant minorities strategically self-selected? Journal of Population Economics, 11, 579-588.
Escribà-Folch, A., Meseguer, C., Wright, J, (2018), Remittances and Protest in Dictatorships. American Journal of Political Science, 62(4), 889–904.
Faini, R, (2006), Remittances and the brain drain. IZA Discussion Paper Series No. 2155, 1-21.
Geweke, J. (1982). Measurement of linear dependence and feedback between multiple time series. Journal of the American Statistical Association, 77(378), 304-313.
Giuliano, P., Arranz, L., (2009), Remittances, financial development and growth. Journal of Development Economics, 90(1), 144–152.
Granger, C. W., (1969), Investigating causal relations by econometric models and cross-spectral methods. Econometrica: Journal of the Econometric Society, 424-438.
Granger, C. W., (1980), Testing for causality: A personal viewpoint. Journal of Economic Dynamics and control, 2, 329-352.
Gunaratna, R., (2003), Sri Lanka: Feeding the Tamil Tigers. In: Ballentine, K. and Sherman, J. (eds) The Political Economy of Armed Conflict: Beyond Greed & Grievance. Boulder, CO: Lynne Rienner, 197–223.
Holst, E., Schrooten, M. (2006), Migration and money: what determines remittances? Evidence from Germany, No a477, Discussion Paper Series, Institute of Economic Research, Hitotsubashi University.
Hosoya, Y. (1991). The decomposition and measurement of the interdependency between second- order stationary processes. Probability Theory and Related Fields, 88(4), 429-444.
KNOMAD (2021), Migration and Development Brief 35, Recovery: COVID-19 Crisis through a Migration Lens, November 2021 Report.
Kollias, C., Tzeremes, P., (2022), The nexus between social unrest and economic growth in Middle East and Central Asia countries, Review of Economics and Political Science, Emerald Publishing, 1-13.
Lucas, R. E. B., Stark, O., (1985), Motivations to remit: Evidence from Botswana., Journal of Political Economy, 93(5), 901-918.
Makhlouf, F., Selmi, R., (2021), The role of remittances in times of socio-political unrest: Evidence from Tunisia, hal-03263815v2.
Melkadze, G., (2012), Macroeconomic determinants of remittances in Georgia: A dynamic panel data approach. International School of Economics at Tbilisi State University.
Mohammed, U. (2021), Remittances, institutions and human development in Sub-Saharan Africa. Journal of Economics and Development, Emerald Publishing Limited.
Phillips, P. C., Perron, P., (1988), Testing for a unit root in time series regression. Biometrika, 75(2), 335-346.
Poirine, B., (1997), A theory of remittances as an implicit family loan arrangement. World Development, 25(4), 589-611.
Pradhan, G., Upadhyay, M., Upadhyaya, K., (2008), Remittances and economic growth in developing countries. The European Journal of Development Research, 20(3), 497-506.
Ratha, D., Sirkeci, I., (2010), Remittances and global financial crisis, Migration Letters, 7(2), 125-131.
Regan, P. M., Frank, R. W., (2014), Migrant remittances and the onset of civil war. Conflict Management and Peace Science, 31(5), 502-520.
State Commission on Migration Issues (2016), Brief Migration Profile Remittances. Tbilisi, Georgia.
Tastan, H. (2015). Testing for spectral Granger causality. The Stata Journal, 15(4), 1157-1166.
Warnecke-Berger, H., (2020), Remittances, the rescaling of social conflicts, and the stasis of elite rule in El Salvador, Latin American Perspectives, 232, 47(3), May 2020, 202-220.
Yoshino, N., Taghizadeh-Hesary, F., Otsuka, M. (2019), Determinants of international remittance inflows in Middle-Income countries in Asia and Pacific, ADBI Working Paper Series, 964.
Zivot, E., Andrews, D.W.K. (1992), Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis. Journal of Business and Economic Statistics, 10, 251-270. http://dx.doi.org/10.2307/1391541
Zurabishvili, T., (2012), Dynamics of remittances in Georgia. CARIM-East Explanatory Note, No. 12/32.
