Examining the impact of geopolitical risk on foreign remittances: evidence from top remittances receiving countries

Abstract

Purpose This study investigates the impact of geopolitical risk (GPR) on foreign remittances (FRs) for the top remittance-receiving countries.Design/methodology/approach The sample includes Mexico, France, Egypt, China, the Philippines, India, Vietnam, Ukraine, Germany and Belgium for the annual period of 1998–2022 using the nonlinear panel autoregressive distributed lag (ARDL) model to determine the asymmetry in the relationship.Findings The results suggest that, in the short term, positive GPR shocks have a positive and significant impact on FRs received. On the other hand, the long-run results suggest that adverse GPR shocks negatively affect FRs received in the sampled countries. Additionally, the study confirms the asymmetric impact of GPR on top remittances received in countries.Research limitations/implications The policymakers, migrants and recipients should consider the asymmetric nature of GPR while making decisions regarding policies and the transfer of remittances. This information can be used to create more effective policies for controlling and reducing the effects of GPR on overseas remittances, such as assisting migrant workers and developing methods to lessen the volatility of these flows.Originality/value Acknowledging the potential fluctuations and uncertainties associated with GPR is crucial to make informed choices regarding remittance-related matters.