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Published by Oxford University Press on behalf of the World Bank
Africa | East Asia and Pacific | Europe and Central Asia | Latin America & Caribbean | Middle East and North Africa | South Asia | Italy
2018-08-03T17:13:29Z | 2018-08-03T17:13:29Z | 2017-02

This paper examines how international remittances are affected by structural characteristics, macroeconomic conditions, and adverse shocks in recipient economies. We exploit a novel, rich panel data set, covering bilateral remittances from 103 Italian provinces to seventy-nine developing countries over the period 2005–2011. We find that remittances are negatively correlated with the business cycle in recipient countries and in particular increase in response to adverse exogenous shocks, such as large terms-of-trade declines. This effect is stronger where the migrant communities have a larger share of newly arrived migrants. Finally, we show that recipient-country financial development is negatively associated with remittances, suggesting that remittances help alleviate credit constraints.


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