The Impact of Remittance on Trade Balance: The Case of Malaysia

Abstract

The paper aims to examines impact of remittance on Malaysia’s trade balance in last over two decades. Using Ordinary Least Squares (OLS) regression model based on the annual data for twenty five years period from 1990 to 2015 to test the impact of remittance on the trade balance. The results showed the remittance influence on the trade balance positively. Our findings indicate that Malaysia did not face a symptom of Dutch disease impacted by the remittance. This is not surprised due to a small remittance to Malaysia, however, the interesting is that the remittance’s fluctuation is semilar to trade balance’s one.