The non-linear impact of digitization on remittances inflow: Evidence from the BRICS

Due to the impact of COVID-19, it is important now more than ever analyze relationship between improvement in digitization and flow remittances order fill void that has come as a result stay at home quarantine orders. Using comprehensive measure encompasses commonly used proxies financial technology (Fintech) employing System Generalized Method Moments (GMM) panel estimation methodology on annual data over period 2004–2018, this paper examines digitization, proxy Fintech, inflow for sample 34 developed developing countries. Our analysis provides an interesting case study Brazil, Russia, India, China South Africa (BRICS), known five emerging markets with great number workers out abroad but below average level digital transfers. Digital Ecosystem Development Index by Katz Callorda (2018), results uncover statistically significant nonlinear measures exact threshold level. More specifically, our indicate may initially increase leading stock received. Nevertheless, once index reaches its further tends decrease penetration increases, giving rise decline rate inflow. This implies marginal effect larger when lower level, before For countries such BRICS, sample, policy makers should apply aggressive policies recoup maximum gains ecosystem. Hence, implications are directed towards increasing investments human capacity including carrying different skill development training programs prepare individuals information age, expanding internet coverage speed especially educational establishments, encouraging use access electronic banking consumers, producers, governments, taking cyber security fraud protection seriously encourage remittances, light renewed utility due recent pandemic. • The remittances. required