Remittances and Financial Development:;Substitutes or Complements in Economic Growth?
AbstractIn a recent study, Chami et al. (2003) suggested that remittances can have a negative impact on;economic growth of the receiving country by diminishing the work effort of the migrants' relatives.;Subsequently, Giuliano and Ruiz-Arranz (2009) found that this moral hazard effect emerges only;when financial development is low. In this paper, we introduce a new indicator of financial;development measuring the efficiency domestic banking system and show that the impact of;remittances on economic growth is negative (positive) in countries where bank efficiency is low;(high). This complementarity result is robust to controls for other financial development and;institutional quality indicators.
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Bibliographic InfoPaper provided by Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences in its series Mo.Fi.R. Working Papers with number 28.
Date of creation: Sep 2009
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bank efficiency; economic growth; financial development; migrants' remittances;
Find related papers by JEL classification:
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-10-03 (All new papers)
- NEP-DEV-2009-10-03 (Development)
- NEP-FDG-2009-10-03 (Financial Development & Growth)
- NEP-MIG-2009-10-03 (Economics of Human Migration)
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