Harnessing The Flow: Leveraging Remittances to Attract FDI to Asia and Africa

This paper explores whether remittance contributes to Foreign Direct Investment (FDI). We use data collected by the World Bank for 89 countries on remittance. The sample included 66 developing and 23 developed countries from 2007 to 2021. We use a multi-linear regression model. We demonstrate that remittance is essential to FDI flow into a country. In particular, remittance has a more significant impact in attracting FDI flow into developing countries than developed countries. Additionally, remittance has a more substantial impact on attracting FDI inflow into African countries than Asian countries. The result supports our hypothesis that remittance affects FDI. The result has significant implications for policymakers and governments of these different regions.