Abstract This paper examines the long-run relationship between migrant remittances and trade balance in nine EU candidate and potential candidate countries: six Western Balkan economies, together with Georgia, Moldova, and Ukraine. While remittances play a central role in household welfare, their macroeconomic relationship with trade remains theoretically ambiguous. Drawing on the New Economics of Labor Migration, the analysis explores whether remittances improve trade balance in transition economies preparing for EU integration. Using panel cointegration techniques (FMOLS and DOLS) for 2010–2023, the results reveal significant regional differences. In the Western Balkans, remittances are negatively associated with trade balance, which is consistent with a pattern in which externally financed consumption is relatively import-intensive. In Georgia, Moldova, and Ukraine, remittances are statistically insignificant, reflecting structural heterogeneity and institutional fragility. The paper thus provides the first comparative evidence on the remittance–trade nexus in EU candidate regions, with direct relevance for enlargement strategies, highlighting how different integration trajectories condition the role of migration in external balance adjustment. Policy implications underscore the need to redirect remittances toward productive investment and strengthen institutional frameworks.
Blouchoutzi et al. (Mon,) studied this question.