The Effect of International Remittances on Financial Development: The Turkish Experience in the Period of 1974-2018

PurposeThe purpose of this paper is to examine the impacts of international remittances on financial development in developing countries.Design/methodology/approachThe focus is on a panel of 124 developing countries for the period 1990–2015. The empirical evidence is based on the instrumental variable-fixed effect model.FindingsResults obtained in this study indicate that a 10 percent increase in the remittance to GDP ratio leads to 1.7 percent increase in domestic credit to private sector, 1.9 percent increase in bank credit, 1.2 percent increase in bank deposit, and 0.8 percent increase in liquid liabilities. The positive impact of remittances on financial development in developing countries is particularly important because financial development fosters long-run growth and reduces poverty.Originality/valueTo address the endogeneity of remittances, the study estimates bilateral remittances and use them to create weighted gross national income per capita and real interest rates of remittance-sending countries. To the best of the author’s knowledge, this is the first study to assess the endogeneity of remittances in this way.

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Harnessing international remittances for financial development: the role of monetery policy

Ghana Journal of Development Studies ◽

10.4314/gjds.v16i2.6 ◽

2019 ◽

Vol 16 (2) ◽

pp. 113 ◽

Cited By ~ 1

Author(s):

Haruna Issahaku

Keyword(s):

Financial Development ◽

International Remittances

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International Remittances and Economic Growth in Ghana: Does the Measure Of Financial Development Matter?

International Journal of Technology and Management Research ◽

10.47127/ijtmr.v2i1.50 ◽

2020 ◽

Vol 2 (1) ◽

pp. 46-59 ◽

Cited By ~ 1

Author(s):

Samuel Antwi ◽

Eugene Oware Koranteng ◽

Eugene Oware Koranteng

Keyword(s):

Economic Growth ◽

Financial Development ◽

Time Series Data ◽

Negative Impact ◽

Positive Impact ◽

Series Data ◽

Aggregate Output ◽

Real Gdp ◽

International Remittances ◽

The Impact

Empirical results of the effect of international remittances on economic growth of individual countries and groups of countries have yielded mixed results. This study is intended to add to the debate on the impact of international remittances on the aggregate output of individual countries, Ghana in this case. An earlier panel data study found a negative impact of remittance on real GDP and prompted further research on the topic for individual countries and groups of countries. The papers which followed and were able to correct for endogeneity in the models, found a mild positive impact of private unrequited remittances on economic growth. The impact of remittances on economic growth of a particular country depends on the proportion of remittances invested and consumed, the level of financial development and the quality of institutions in the country. This study used time series data from 1990 to 2014 on Ghana and found a positive impact of remittances on the growth rate of real GDP. Engel and Granger Cointegration test and Error Correction Models were used. Remittances were found to be pro-cyclical. Granger causality tests which corrects for the errors of cointegrated variables found causality running from financial development to remittances and from remittances to real GDP. Remittances have been found in other studies to benefit the Ghanaian economy by reducing poverty and sustaining the current account. This study shows a positive impact of remittances on aggregate output. Thus requiring policies to increase the flows and encourage their investment. Keywords: International Remittances, Economic Growth, Ghana, Financial Development.

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Financial Systems and economic Development in the Russian Regions: A Comparative Analysis

Voprosy Ekonomiki ◽

10.32609/0042-8736-2015-10-94-108 ◽

2015 ◽

pp. 94-108 ◽

Cited By ~ 3

Author(s):

K. Krinichansky

Keyword(s):

Economic Development ◽

Comparative Analysis ◽

Financial Development ◽

Public Debt ◽

Fixed Capital ◽

Russian Regions ◽

Growth Mechanisms ◽

Financial Systems ◽

Debt Market ◽

Regions Of Russia

The paper identifies and assesses the closeness of the connection between incremental indicators of the financial development in the regions of Russia with the incremental regional GDP and the investment in fixed capital. It is shown that the positioning of the region as an independent participant of public debt market matters: the regional GDP and investment in fixed capital grow more rapidly in the regions which are regularly borrowing on the sub-federal bonds market. The paper also demonstrates that the poorly developed financial system in some regions have caused the imperfection of the growth mechanisms since the economy is not able to use the financial system’s functions.

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International Remittances and Private Healthcare in Kerala, India

MIGRATION LETTERS ◽

10.33182/ml.v17i3.778 ◽

2020 ◽

Vol 17 (3) ◽

pp. 445-460

Author(s):

Mohd Imran Khan ◽

Valatheeswaran C.

Keyword(s):

Instrumental Variable ◽

Capital Investment ◽

Healthcare Expenditure ◽

Healthcare Services ◽

Private Healthcare ◽

International Remittances ◽

Variable Approach ◽

Using Data ◽

The Impact ◽

Instrumental Variable Approach

The inflow of international remittances to Kerala has been increasing over the last three decades. It has increased the income of recipient households and enabled them to spend more on human capital investment. Using data from the Kerala Migration Survey-2010, this study analyses the impact of remittance receipts on the households’ healthcare expenditure and access to private healthcare in Kerala. This study employs an instrumental variable approach to account for the endogeneity of remittances receipts. The empirical results show that remittance income has a positive and significant impact on households’ healthcare expenditure and access to private healthcare services. After disaggregating the sample into different heterogeneous groups, this study found that remittances have a greater effect on lower-income households and Other Backward Class (OBC) households but not Scheduled Caste (SC) and Scheduled Tribe (ST) households, which remain excluded from reaping the benefit of international migration and remittances.

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Credit Market Depth and Income Inequality in Vietnam: A Panel-Data Analysis

Journal of Economics and Development ◽

10.33301/2016.18.02.01 ◽

2016 ◽

pp. 5-18

Author(s):

Hoi Le Quoc ◽

Hoi Chu Minh

Keyword(s):

Data Analysis ◽

Panel Data ◽

Income Inequality ◽

Financial Development ◽

Inflection Point ◽

Panel Data Analysis ◽

Credit Market ◽

Method Of Moment ◽

Market Depth ◽

Generalized Method Of Moment

Financial development could exert various effects on income distribution of a country. By employing Generalized Method of Moment, this paper aims at examining the impacts of credit market depth, one of most used financial development barometers, on income inequality in Vietnam. The empirical findings show that expanding credit market in the country could lead to higher income inequality. We have not found evidence that supports the hypothesis of an inverted U-shaped relation ever introduced by Greenwood and Jovanovich, although this hypothesis may still hold in a sense that Vietnam has not reached to the inflection point to generate such a curve alike.

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