Author Affiliation, Ana.
Motivations to remit in CARICOM: A GMM approach
Social and Economic Studies
Date of Publication
The purpose of this paper is to determine what set of factors explain the flow of remittances to a number of Caribbean countries that are members of CARICOM. These are mostly small developing countries that must generate foreign exchange to reduce their current account deficit on the balance of payments, Thus remittance flows are an important means of reducing this constraint for these countries. The methodology employed is a dynamic unbalanced panel of nine countries utlising Generalised Methods of Moments (GMM) estimation in order to account for a lagged dependent variable. A major finding is that remittance flows are driven by strong investment motives in financial instruments and there is some scope for public policy to encourage greater inflows over time. This is the first study to employ a dynamic panel data approach to explaining remittance flows to CARICOM countries.....