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The paper estimates the impact of regional remittances on poverty in Mexico, considering direct and indirect effects. We used a spatial panel Durbin specification to estimate potential spatial effects of remittances on poverty. The results showed that the coefficients of the total and direct effects were negative, implying that remittances reduce moderate and extreme poverty across Mexican states. The results indicated that spatial spillovers from economic interactions between states would only contribute to reducing extreme poverty but not moderate poverty. Per capita gross disposable income had direct and indirect effects on the reduction of moderate and extreme poverty at the state level.
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