U.S. Presidential Election Cycle and Remittance Transfers of Mexican Immigrants
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U.S. Presidential Election Cycle and Remittance Transfers of Mexican Immigrants Fanglu Sun1 Received: 8 September 2019 / Accepted: 24 August 2020 © Fudan University 2020
Abstract For developing countries international remittances first started exceeding official aid in the mid-1990s and then overtook foreign direct investment in 2019, becoming the biggest source of external financing. National elections constitute a major source of redistribution of political power and policy changes thereafter. However, the effect that national elections in the immigrants’ host country have on remittance transfers has been underexplored by the existing literature. This research was intended to bridge this gap. By analyzing the monthly remittance flows that entered Mexico between 1995 and 2018, it found a cyclical effect of the American presidential electoral process on remittance transfers to Mexico. The primary phase of the election, in particular, was associated with a greater flow of remittances. Interestingly, the effect was not significantly greater in elections involving anti-immigrant candidates such as Donald Trump in the 2016 election. However, it found that remittance flows from the U.S. to Mexico have increased significantly during Trump’s presidency. Keywords U.S. presidential election cycle · Mexican immigrants · Remittance transfers · Political uncertainty
* Fanglu Sun [email protected] 1
School of International Relations and Public Affairs, Fudan University, Room 716, Wenke Building, 220 Handan Road, Yangpu District, Shanghai, China
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Chinese Political Science Review
1 Introduction Migration is one of the defining features and driving forces of globalization. Based upon the estimates released by the United Nations in 2019, close to 272 million people (equivalent 3.5% of the world’s population) live outside their native country, representing 23% increase from 2010 and 56% increase from 2000.1 With a sizable diaspora of 17.5 million, India has become the top origin country for expatriates, exceeding Mexico (11.8 million) and China (10.7 million).2 Although immigrants constitute less than 2% of the total population of developing countries, they consist of more than 10% of the total population of developed countries. In 2019 international immigrants represented 21%, 16%, and 11% of the population in Oceania, North America, and Europe respectively, while their shares all are below 2% in Africa, Asia, and Latin America.3 The U.S. has been the world’s top destination for international migrants since 1970, which nowadays hosts nearly 19% of the world’s total international migrants. The immigrant population in the U.S. has more than quadrupled over the past 50 years, increasing from less than 12 million in 1970 to about 51 million in 2019. International migrants oftentimes maintain close ties with their home communities through various familial, economic, political, social, and cultural connections. One of the tangible ways is through remittances they transfer home, which hit a record h
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