A Statistical Analysis of the Impact of Remittances on Economic Growth in the Balkans

Abstract

Remittances have been the positive consequences of the painful phenomena of poor countries. Emigration has been in the past of the European Continent and continues to be a significant feature in many countries of Eastern and South-Eastern Europe. The states of the Western Balkans have been interested in this phenomenon in a sustainable way in the last 20 years due to war, changes in economic systems, or political instability. In the various studies related to the effects of Remittances in the countries of origin, direct and positive impacts on GDP have been observed, but in other cases, these impacts are questioned since Remittances also mean that the workforce or human resources are not active in the country of origin and at the same time create a lack of GDP growth. For this reason, remittances and their fluctuations have never had a positive impact on the GDP of the countries of origin. The objective of this paper is to identify if there is a positive and direct impact between the level of remittances in relation to the Gross Domestic Product and economic growth for the five countries of the Western Balkans (Serbia, Bosnia Herzegovina, Montenegro, North Macedonia, and Albania) during the period 2000-2021 with annual data according to World Bank data.