Dynamic connectedness between global geopolitical tension and flow of foreign remittances amid heightened geopolitical risk with application of NARDL estimation approach

Abstract

This empirical study examines the dynamic connectedness between global geopolitical tension (GPR) and the flow of foreign remittances (FR) in response to evolving global and strategic economic dynamics. The study employs the NARDL estimation model to assess the symmetric and asymmetric connectedness among key indicators influencing economic changes in BRIC economies. The study used quarterly frequency data from 1998 to 2023. The short run results reveal that GPR exhibits a symmetric relationship with the flow of FR across the BRIC economies. However, in the long run, an asymmetric association between GPR and the flow of FR is observed. These findings underscore the importance for policymakers, migrants, and recipients to consider the asymmetric and volatile nature of global geopolitical tension when formulating policies and making decisions regarding remittance transfers. Such insights contribute to more informed decision-making processes and effective policy interventions in the realm of remittance flows.