Non-Linear Effect of Remittances on Banking Sector Development: Panel Evidence from Developing Countries
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Date
2016-10
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Scientific Research
Abstract
This paper examines the impact of remittances on financial sector development in a
panel of 19 developing countries. Contrary to previous studies that focus on mean
effects, it uses quantile regression methodology to examine whether the effect of remittances
on financial development is the same for less and more financially developed
countries. The results point out that remittances promote financial development
only in less financially developed countries. Further, the effect of income is
positive and larger in less financially developed countries. Trade openness is positively
related to financial development while inflation and urbanization are negatively
related to it.
Description
Keywords
Remittances, Financial Development, Quantile Regression, Developing Countries
Citation
Theoretical Economics Letters, 2016, 6, 1096-1104