Does Remittance Income Spur Food Imports? Evidence from a Developing Country
Keywords:
Remittance, Food Import, Food Security, ARDL, NigeriaAbstract
As a source of foreign earning, remittance income has been considered to be a financial resource which could be utilized to pursue economic development goals. This study therefore examines the effectiveness of remittance income on food importation in Nigeria using time-series data for the period 1977 to 2019. The study employed the auto-regressive distributed lag (ARDL) estimation technique to achieve the aim of the study. Results from the analyses indicates that remittance income have negative impact on food importation in both the short-run and long-run. We therefore conclude that remittance inflows do not play a crucial role in increasing food import. Nigeria can benefit from it by investing remittance in productive investment that will have a positive effect on domestic agricultural productivity. Additionally, policy that discourages food importation in the favour of domestic agricultural production should be promoted. This include ban or increase tax of selected food import where the country does not have an absolute advantage and depreciation of real effective exchange rate.
References
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Adams, Jr, R. & Cuecuecha, A. (2010b). The Economic Impact of International Remittances on Poverty and Household Consumption and Investment in Indonesia, World Bank Policy Research Working Paper, No. 5433.
Adams, Jr., R. & Cuecuecha, A. (2010a), Remittances, household expenditure and investment in Guatemala, World Devlopment, Vol. 38, No. 11, pp. 1626-1641.
Adams, R. (2006). International Remittances and the Household: Analysis and Review of Global Evidence, Journal of African Economies, Vol. 15, no. 2, pp. 396-425
Ali, A., Imran, M., Ashfaq, M., Ghafoor, A., Waseem, M. & Hassan, S. (2017). Determinants influencing edible oil import in Pakistan. J Agric. Res., Vol. 55, no. 1, pp. 137-149.
Ali, A., Saeed, M., Imran, M., Mushtaq, K. & Ghafoor, A. (2018). Investigation of the impact of foreign remittance on agricultural development in Pakistan: a time series analysis, Pakistan Journal of Applied Economics, Vol. 28, no.1, pp. 131-146.
Alkhathlan, K. (2013). The nexus between remittance outflows and growth: A study of Saudi Arabia, Economic Modelling, Vol. 33, pp. 695-700.
Amusa, K. & Oyinlola, M. (2019). The effectiveness of government expenditure on economic growth in Botswana. African Journal of Economic and Management Studies, Vol. 10, no. 3, pp. 368-384.
Atuoye, K., Kuuire, V., Kangmennaang, J., Antabe, R. & Luginaah, I. (2017). Residential remittances and food security in the upper west region of Ghana, International Migration, Vol. 55, no. 4, pp. 18–34.
Azad, A., (2005), Migrant Workers Remittances; a Source of Finance for Micro-Enterprise Development in Bangladesh, In Remittance; Development impact and future Prospects, World Bank, pp. 103-118.
Azam, J., Gubert, F., (2006), Migrants’ remittances and the household in Africa: A review of the evidence, Journal of African Economies, Vol. 15, supplement 2, pp. 436-62.
Baiyegunhi, L., Sikhosana, A., (2012), An estimation of import demand function for wheat in South Africa: 1971-2007, African, Journal of Agricultural Research, Vol. 7, no. 37, pp. 5175-5180.
Barajas, A., Chami, R., Fullenkamp, C., Gapen, M. Montiel, P., (2009), Do workers’ remittances promote economic growth, In IMF Working Paper, International Monetary Fund: Washington, DC, USA, 2009,
Barajas, A., Chami, R., Hakura, D., Montiel, P., (2011), Workers’ remittances and the equilibrium real exchange rate: theory and evidence”, IMF Working Paper WP/10/287, International Monetary Fund, Washington DC.
Barua, S., Majumder, M., Aktharuzzaman, M., (2007), Determinants of workers’ remittances in Bangladesh: an empirical study, Policy Analysis Unit (PAU), Working Paper Series: WP 0713, Bangladesh Bank, Dhaka, Bangladesh.
Boboc, C., Vasile, V., Todose, D., (2012), Vulnerabilities associated to migration trajectories from Romania to EU countries, Procedia Social and Behavioural Sciences., Vol. 62, pp. 352–359.
Bollard, A., McKenzie, D., Morton, M., (2010), The remitting patterns of African migrants in OECD, Journal of African Economies, Vol. 19, no. 5, pp. 605–34.
Bussolo, M., Medvedev, D., (2007), Do remittances have a flip side? a general equilibrium analysis of remittances, labor supply responses and policy options for Jamaica, Policy Research Working Paper/ No. 4143, World Bank, Washington DC.
Chami, R., Fullenkamp, C., Jahjah, S., (2003), Are immigrant remittance flows a source of capital for development? IMF Working Papers 03/189, International Monetary Fund, Washington, D.C.
Connell, J., Conway, D., (2000), Migration andrRemittances in Island microstates: a comparative perspective on the South Pacific and the Caribbean, International Journal of Urban and Regional Research, Vol. 24, pp. 52–78.
Donou-Adonsou, F., Lim, S., (2015), An empirical analysis of remittance flows into West African Economic and Monetary Union: A panel time-series approach, Applied Economics, Vol. 48, pp. 1–12.
Ebadi, N., Ahmadi, D., Sirkeci, I., Melgar- Quiñonez, H., (2018), The impact of remittances on food security status in the Global South, Remittances Review, Vol. 3, no. 2, pp. 135- 150.
FAO, (2008), The state of agricultural commodity markets: high food prices and the food crisis experiences and lessons learned, FAO, Rome.
Farzanegan, M., Hassan, S. (2016), Remittances and trade balance: evidence from the Middle East and North Africa, No. 6172, CESIfo Working Paper, München.
Glytsos., N, (2005), The contribution of Remittances to Growth, Journal of Economic Studies, Vol. 32, no. 6, pp. 468-396.
Hyuha T., William, E., Grace, B., (2017), Determinants of import demand of rice in Uganda, International Journal of Applied and Pure Science and Agriculture (IJAPSA), Vol. 03, Issue 3, pp. 75-81.
Keho, Y., (2020), Impact of remittances on financial development: revisiting the evidence for ECOWAS countries, Theoretical Economics Letters, Vol.10, pp. 169-179.
Khan, M., Khattak, N., Bakhtiar, Y., Nawab, B., Rahim, T., Ali, A., (2007), Remittances as a determinant of import function: an empirical evidence from Pakistan, Sarhad Journal of Agriculture, Vol., 23, no. 4, pp. 1187-1189.
Kiawu, J., Jones, K., (2013), Implications of food aid and remittances for West African food import demand, African Journal of Agricultural and Resource Economics, Vol. 8, no. 1, pp. 30 - 44.
Kireyev, (2006), The macroeconomics of remittances: the case of Tajikistan, IMF, Washington, D.C.
Konte, M., (2018), Do remittances not promote growth? A finite mixture-of-regressions approach, Empirical Economics, Vol. 54, pp. 747–782.
Kumar, R., Stauvermann, P., Kumar, N., Shahzad, S., (2018), Revisiting the threshold effect of remittances on total factor productivity growth in South Asia: a study of Bangladesh and India. Applied Economics, Vol. 50, pp. 2860–2877.
Lartey, E., Mandelman, F., Acosta, P., (2008), Remittances, exchange rate regimes, and the dutch disease: a panel data analysis, FRB of Atlanta Working Paper No. 2008-12.
Levitt, P., (1998), Social remittances: migration driven local-level forums of cultural diffusion, International Migration Review, Vol. 32, no. 4, pp. 926–948.
Lim, S., Simmons, W., (2015), Do remittances promote economic growth in the Caribbean community and common market?, Journal of Economics and Business, Vol. 77, pp. 42-59.
Lopez, H., Molina, L., Bussolo, M., (2007), Remittances and the real exchange rate, World Bank Policy Research Working Paper No. 4213.Washington DC.
Mabrouk, F., Mekni, M., (2018). Remittances and food security in African countries, African Development Review, Vol. 30, no. 3, pp. 252–263.
Muktadir-Al-Mukit, D., Shafiullah, Z., Sajib, A., (2013), Determination of causality between remittance and import: evidence from Bangladesh, International Journal of Business and Social Research (IJBSR), Vol. 3, no. 3, pp. 55-62.
Niaz, M., Ahmad, N., Shah, M., Alam, I., Jawad, M., (2010), The impact of foreign remittances on the socio-economic conditions of households, Sarhad Journal of Agriculture, Vol., 26, no. 1, pp. 141-145.
Orrenius P. M, Zavodny M, Cañas J. and Coronado R., (2010). Do Remittances Boost Economic Development? Evidence from Mexican States. Federal Reserve Bank of Dallas, Research Department Working Paper 1007
Quisumbing, A., McNiven, S., (2010), Moving forward, looking back: The impact of migration and remittances on assets, consumption, and credit constraints in the rural Philippines, The Journal of Development Studies, Vol. 46, no. 1, pp. 91-113.
Rena, R. (2005), Challenges for food security in Eritrea: a descriptive and qualitative analysis, African Development Review, Vol. 17, No. 2.
Safoulanitou, L., Ndinga, M., (2010), An empirical analysis of the determinants of food imports in Congo. AERC Research Paper 195, African Economic Research Consortium, Nairobi.
Sulemana, I., Anarfo, E., Quartey, P., (2018), International remittances and household food security in sub-Saharan Africa, Migration and Development, Vol. 8, no. 2, pp. 264-280.
UNCTAD (2013), Report of the United Nations Conference on Trade and Development: Maximixing the development impact of remittances’
Yeboah, T., Boamah, E., Appai, T., (2019), Broadening the remittance debate: reverse flows, reciprocity and social relations between UK-based ghanaian migrants and families back home. Journal of International Migration and Integration, pp.1-22.
Zaman, K., lmrani, N., (2005), Workers' remittances and import demand in Pakistan, The Philippine Review of Economics, Vol. XLII, no. 2, pp. 27-137.
Adams, Jr, R. & Cuecuecha, A. (2010b). The Economic Impact of International Remittances on Poverty and Household Consumption and Investment in Indonesia, World Bank Policy Research Working Paper, No. 5433.
Adams, Jr., R. & Cuecuecha, A. (2010a), Remittances, household expenditure and investment in Guatemala, World Devlopment, Vol. 38, No. 11, pp. 1626-1641.
Adams, R. (2006). International Remittances and the Household: Analysis and Review of Global Evidence, Journal of African Economies, Vol. 15, no. 2, pp. 396-425
Ali, A., Imran, M., Ashfaq, M., Ghafoor, A., Waseem, M. & Hassan, S. (2017). Determinants influencing edible oil import in Pakistan. J Agric. Res., Vol. 55, no. 1, pp. 137-149.
Ali, A., Saeed, M., Imran, M., Mushtaq, K. & Ghafoor, A. (2018). Investigation of the impact of foreign remittance on agricultural development in Pakistan: a time series analysis, Pakistan Journal of Applied Economics, Vol. 28, no.1, pp. 131-146.
Alkhathlan, K. (2013). The nexus between remittance outflows and growth: A study of Saudi Arabia, Economic Modelling, Vol. 33, pp. 695-700.
Amusa, K. & Oyinlola, M. (2019). The effectiveness of government expenditure on economic growth in Botswana. African Journal of Economic and Management Studies, Vol. 10, no. 3, pp. 368-384.
Atuoye, K., Kuuire, V., Kangmennaang, J., Antabe, R. & Luginaah, I. (2017). Residential remittances and food security in the upper west region of Ghana, International Migration, Vol. 55, no. 4, pp. 18–34.
Azad, A., (2005), Migrant Workers Remittances; a Source of Finance for Micro-Enterprise Development in Bangladesh, In Remittance; Development impact and future Prospects, World Bank, pp. 103-118.
Azam, J., Gubert, F., (2006), Migrants’ remittances and the household in Africa: A review of the evidence, Journal of African Economies, Vol. 15, supplement 2, pp. 436-62.
Baiyegunhi, L., Sikhosana, A., (2012), An estimation of import demand function for wheat in South Africa: 1971-2007, African, Journal of Agricultural Research, Vol. 7, no. 37, pp. 5175-5180.
Barajas, A., Chami, R., Fullenkamp, C., Gapen, M. Montiel, P., (2009), Do workers’ remittances promote economic growth, In IMF Working Paper, International Monetary Fund: Washington, DC, USA, 2009,
Barajas, A., Chami, R., Hakura, D., Montiel, P., (2011), Workers’ remittances and the equilibrium real exchange rate: theory and evidence”, IMF Working Paper WP/10/287, International Monetary Fund, Washington DC.
Barua, S., Majumder, M., Aktharuzzaman, M., (2007), Determinants of workers’ remittances in Bangladesh: an empirical study, Policy Analysis Unit (PAU), Working Paper Series: WP 0713, Bangladesh Bank, Dhaka, Bangladesh.
Boboc, C., Vasile, V., Todose, D., (2012), Vulnerabilities associated to migration trajectories from Romania to EU countries, Procedia Social and Behavioural Sciences., Vol. 62, pp. 352–359.
Bollard, A., McKenzie, D., Morton, M., (2010), The remitting patterns of African migrants in OECD, Journal of African Economies, Vol. 19, no. 5, pp. 605–34.
Bussolo, M., Medvedev, D., (2007), Do remittances have a flip side? a general equilibrium analysis of remittances, labor supply responses and policy options for Jamaica, Policy Research Working Paper/ No. 4143, World Bank, Washington DC.
Chami, R., Fullenkamp, C., Jahjah, S., (2003), Are immigrant remittance flows a source of capital for development? IMF Working Papers 03/189, International Monetary Fund, Washington, D.C.
Connell, J., Conway, D., (2000), Migration andrRemittances in Island microstates: a comparative perspective on the South Pacific and the Caribbean, International Journal of Urban and Regional Research, Vol. 24, pp. 52–78.
Donou-Adonsou, F., Lim, S., (2015), An empirical analysis of remittance flows into West African Economic and Monetary Union: A panel time-series approach, Applied Economics, Vol. 48, pp. 1–12.
Ebadi, N., Ahmadi, D., Sirkeci, I., Melgar- Quiñonez, H., (2018), The impact of remittances on food security status in the Global South, Remittances Review, Vol. 3, no. 2, pp. 135- 150.
FAO, (2008), The state of agricultural commodity markets: high food prices and the food crisis experiences and lessons learned, FAO, Rome.
Farzanegan, M., Hassan, S. (2016), Remittances and trade balance: evidence from the Middle East and North Africa, No. 6172, CESIfo Working Paper, München.
Glytsos., N, (2005), The contribution of Remittances to Growth, Journal of Economic Studies, Vol. 32, no. 6, pp. 468-396.
Hyuha T., William, E., Grace, B., (2017), Determinants of import demand of rice in Uganda, International Journal of Applied and Pure Science and Agriculture (IJAPSA), Vol. 03, Issue 3, pp. 75-81.
Keho, Y., (2020), Impact of remittances on financial development: revisiting the evidence for ECOWAS countries, Theoretical Economics Letters, Vol.10, pp. 169-179.
Khan, M., Khattak, N., Bakhtiar, Y., Nawab, B., Rahim, T., Ali, A., (2007), Remittances as a determinant of import function: an empirical evidence from Pakistan, Sarhad Journal of Agriculture, Vol., 23, no. 4, pp. 1187-1189.
Kiawu, J., Jones, K., (2013), Implications of food aid and remittances for West African food import demand, African Journal of Agricultural and Resource Economics, Vol. 8, no. 1, pp. 30 - 44.
Kireyev, (2006), The macroeconomics of remittances: the case of Tajikistan, IMF, Washington, D.C.
Konte, M., (2018), Do remittances not promote growth? A finite mixture-of-regressions approach, Empirical Economics, Vol. 54, pp. 747–782.
Kumar, R., Stauvermann, P., Kumar, N., Shahzad, S., (2018), Revisiting the threshold effect of remittances on total factor productivity growth in South Asia: a study of Bangladesh and India. Applied Economics, Vol. 50, pp. 2860–2877.
Lartey, E., Mandelman, F., Acosta, P., (2008), Remittances, exchange rate regimes, and the dutch disease: a panel data analysis, FRB of Atlanta Working Paper No. 2008-12.
Levitt, P., (1998), Social remittances: migration driven local-level forums of cultural diffusion, International Migration Review, Vol. 32, no. 4, pp. 926–948.
Lim, S., Simmons, W., (2015), Do remittances promote economic growth in the Caribbean community and common market?, Journal of Economics and Business, Vol. 77, pp. 42-59.
Lopez, H., Molina, L., Bussolo, M., (2007), Remittances and the real exchange rate, World Bank Policy Research Working Paper No. 4213.Washington DC.
Mabrouk, F., Mekni, M., (2018). Remittances and food security in African countries, African Development Review, Vol. 30, no. 3, pp. 252–263.
Muktadir-Al-Mukit, D., Shafiullah, Z., Sajib, A., (2013), Determination of causality between remittance and import: evidence from Bangladesh, International Journal of Business and Social Research (IJBSR), Vol. 3, no. 3, pp. 55-62.
Niaz, M., Ahmad, N., Shah, M., Alam, I., Jawad, M., (2010), The impact of foreign remittances on the socio-economic conditions of households, Sarhad Journal of Agriculture, Vol., 26, no. 1, pp. 141-145.
Orrenius P. M, Zavodny M, Cañas J. and Coronado R., (2010). Do Remittances Boost Economic Development? Evidence from Mexican States. Federal Reserve Bank of Dallas, Research Department Working Paper 1007
Quisumbing, A., McNiven, S., (2010), Moving forward, looking back: The impact of migration and remittances on assets, consumption, and credit constraints in the rural Philippines, The Journal of Development Studies, Vol. 46, no. 1, pp. 91-113.
Rena, R. (2005), Challenges for food security in Eritrea: a descriptive and qualitative analysis, African Development Review, Vol. 17, No. 2.
Safoulanitou, L., Ndinga, M., (2010), An empirical analysis of the determinants of food imports in Congo. AERC Research Paper 195, African Economic Research Consortium, Nairobi.
Sulemana, I., Anarfo, E., Quartey, P., (2018), International remittances and household food security in sub-Saharan Africa, Migration and Development, Vol. 8, no. 2, pp. 264-280.
UNCTAD (2013), Report of the United Nations Conference on Trade and Development: Maximixing the development impact of remittances’
Yeboah, T., Boamah, E., Appai, T., (2019), Broadening the remittance debate: reverse flows, reciprocity and social relations between UK-based ghanaian migrants and families back home. Journal of International Migration and Integration, pp.1-22.
Zaman, K., lmrani, N., (2005), Workers' remittances and import demand in Pakistan, The Philippine Review of Economics, Vol. XLII, no. 2, pp. 27-137.
Published
2020-09-03
How to Cite
Megbowon, E., & Sanusi, G. (2020). Does Remittance Income Spur Food Imports? Evidence from a Developing Country: Array. Acta Universitatis Danubius. Œconomica, 16(5). Retrieved from https://dj.univ-danubius.ro/index.php/AUDOE/article/view/427
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Business Administration and Business Economics
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