The Role of Remittances in Economic Growth and Environmental Sustainability: A Cross-country Analysis
Although remittances significantly influence economic stability, their role in sustainable growth and environmental impact remains uncertain. While these financial inflows enhance household welfare, their effects on gross domestic product (GDP), carbon emissions, and trade openness require further...
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Environmental Research Institute, Chulalongkorn University
2025-05-01
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| Series: | Applied Environmental Research |
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| Online Access: | https://ph01.tci-thaijo.org/index.php/ecticit/article/view/216323https:/ph01.tci-thaijo.org/index.php/aer/article/view/259225 |
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| author | Bishnu B. Khatri Omkar Poudel Pradeep Acharya |
| author_facet | Bishnu B. Khatri Omkar Poudel Pradeep Acharya |
| author_sort | Bishnu B. Khatri |
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Although remittances significantly influence economic stability, their role in sustainable growth and environmental impact remains uncertain. While these financial inflows enhance household welfare, their effects on gross domestic product (GDP), carbon emissions, and trade openness require further exploration. This study investigates the economic and environmental linkages of remittances in India, Mexico, China, the Philippines, and Pakistan, the top five remittance-receiving countries. Using panel data analysis, this study employs Dumitrescu Hurlin causality tests and dynamic ordinary least squares (DOLS) to assess the long-term and causal relationships between urbanization, trade openness, GDP per capita, carbon emissions, and remittances. Data from the World Bank for the five largest remittance-receiving countries are used to ensure robust empirical analysis. The findings indicate that remittances do not directly drive GDP or emissions but that urbanization and trade openness significantly shape economic and environmental outcomes. This study supports the environmental Kuznets curve (EKC) hypothesis and confirms that carbon emissions influence remittance flows, which aligns with the environmental migration hypothesis. This study highlights the importance of remittance-backed investments in renewable energy, green infrastructure, and financial inclusion programs. Policymakers should create incentives for migrants to channel remittances into productive sectors rather than pure consumption. Trade openness has emerged as a key driver of emissions, necessitating sustainable trade policies that integrate environmental regulations. The study underscores the need for targeted policies that enhance the productive use of remittances while mitigating environmental risk.
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| format | Article |
| id | doaj-art-b2a15d230cf04dd7b0df7fc6d6a53697 |
| institution | Kabale University |
| issn | 2287-075X |
| language | English |
| publishDate | 2025-05-01 |
| publisher | Environmental Research Institute, Chulalongkorn University |
| record_format | Article |
| series | Applied Environmental Research |
| spelling | doaj-art-b2a15d230cf04dd7b0df7fc6d6a536972025-08-20T03:26:48ZengEnvironmental Research Institute, Chulalongkorn UniversityApplied Environmental Research2287-075X2025-05-0147210.35762/AER.2025012The Role of Remittances in Economic Growth and Environmental Sustainability: A Cross-country AnalysisBishnu B. Khatri0Omkar Poudel1Pradeep Acharya2Central Department of Rural Development, Tribhuvan University (TU), NepalBirendra Multiple Campus, Tribhuvan University, NepalTribhuvan University, Kathmandu, Nepal Although remittances significantly influence economic stability, their role in sustainable growth and environmental impact remains uncertain. While these financial inflows enhance household welfare, their effects on gross domestic product (GDP), carbon emissions, and trade openness require further exploration. This study investigates the economic and environmental linkages of remittances in India, Mexico, China, the Philippines, and Pakistan, the top five remittance-receiving countries. Using panel data analysis, this study employs Dumitrescu Hurlin causality tests and dynamic ordinary least squares (DOLS) to assess the long-term and causal relationships between urbanization, trade openness, GDP per capita, carbon emissions, and remittances. Data from the World Bank for the five largest remittance-receiving countries are used to ensure robust empirical analysis. The findings indicate that remittances do not directly drive GDP or emissions but that urbanization and trade openness significantly shape economic and environmental outcomes. This study supports the environmental Kuznets curve (EKC) hypothesis and confirms that carbon emissions influence remittance flows, which aligns with the environmental migration hypothesis. This study highlights the importance of remittance-backed investments in renewable energy, green infrastructure, and financial inclusion programs. Policymakers should create incentives for migrants to channel remittances into productive sectors rather than pure consumption. Trade openness has emerged as a key driver of emissions, necessitating sustainable trade policies that integrate environmental regulations. The study underscores the need for targeted policies that enhance the productive use of remittances while mitigating environmental risk. https://ph01.tci-thaijo.org/index.php/ecticit/article/view/216323https:/ph01.tci-thaijo.org/index.php/aer/article/view/259225RemittancesGDP per capitaCarbon emissionEnvironmental Kuznets curveTrade opennessUrbanization |
| spellingShingle | Bishnu B. Khatri Omkar Poudel Pradeep Acharya The Role of Remittances in Economic Growth and Environmental Sustainability: A Cross-country Analysis Applied Environmental Research Remittances GDP per capita Carbon emission Environmental Kuznets curve Trade openness Urbanization |
| title | The Role of Remittances in Economic Growth and Environmental Sustainability: A Cross-country Analysis |
| title_full | The Role of Remittances in Economic Growth and Environmental Sustainability: A Cross-country Analysis |
| title_fullStr | The Role of Remittances in Economic Growth and Environmental Sustainability: A Cross-country Analysis |
| title_full_unstemmed | The Role of Remittances in Economic Growth and Environmental Sustainability: A Cross-country Analysis |
| title_short | The Role of Remittances in Economic Growth and Environmental Sustainability: A Cross-country Analysis |
| title_sort | role of remittances in economic growth and environmental sustainability a cross country analysis |
| topic | Remittances GDP per capita Carbon emission Environmental Kuznets curve Trade openness Urbanization |
| url | https://ph01.tci-thaijo.org/index.php/ecticit/article/view/216323https:/ph01.tci-thaijo.org/index.php/aer/article/view/259225 |
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