IDEAS home Printed from https://ideas.repec.org/p/anc/wmofir/28.html
   My bibliography  Save this paper

Remittances and Financial Development:;Substitutes or Complements in Economic Growth?

Author

Listed:
  • Giulia Bettin

    () (Hamburg Institute of International Economics (HWWI), Germany)

  • Alberto Zazzaro

    () (Universit… Politecnica delle Marche, MoFiR)

Abstract

In 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.

Suggested Citation

  • Giulia Bettin & Alberto Zazzaro, 2009. "Remittances and Financial Development:;Substitutes or Complements in Economic Growth?," Mo.Fi.R. Working Papers 28, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
  • Handle: RePEc:anc:wmofir:28
    as

    Download full text from publisher

    File URL: http://docs.dises.univpm.it/web/quaderni/pdfmofir/Mofir028.pdf
    File Function: First version, 2009
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. de la Grandville,Olivier, 2009. "Economic Growth," Cambridge Books, Cambridge University Press, number 9780521725200, December.
    2. Lucchetti, Riccardo & Papi, Luca & Zazzaro, Alberto, 2001. "Banks' Inefficiency and Economic Growth: A Micro-Macro Approach," Scottish Journal of Political Economy, Scottish Economic Society, vol. 48(4), pages 400-424, September.
    3. de la Grandville,Olivier, 2009. "Economic Growth," Cambridge Books, Cambridge University Press, number 9780521898010, December.
    4. Allen Berger & Iftekhar Hasan & Leora Klapper, 2004. "Further Evidence on the Link between Finance and Growth: An International Analysis of Community Banking and Economic Performance," Journal of Financial Services Research, Springer;Western Finance Association, vol. 25(2), pages 169-202, April.
    5. Giuliano, Paola & Ruiz-Arranz, Marta, 2009. "Remittances, financial development, and growth," Journal of Development Economics, Elsevier, pages 144-152.
    6. Ralph Chami & Connel Fullenkamp & Samir Jahjah, 2005. "Are Immigrant Remittance Flows a Source of Capital for Development?," IMF Staff Papers, Palgrave Macmillan, vol. 52(1), pages 55-81, April.
    7. Giuliano, Paola & Ruiz-Arranz, Marta, 2009. "Remittances, financial development, and growth," Journal of Development Economics, Elsevier, pages 144-152.
    8. Inklaar, Robert & Koetter, Michael, 2008. "Financial dependence and industry growth in Europe: Better banks and higher productivity," GGDC Research Memorandum GD-100, Groningen Growth and Development Centre, University of Groningen.
    9. Hasan, Iftekhar & Koetter, Michael & Wedow, Michael, 2007. "The quality of banking and regional growth," Discussion Paper Series 2: Banking and Financial Studies 2007,10, Deutsche Bundesbank, Research Centre.
    10. Catrinescu, Natalia & Leon-Ledesma, Miguel & Piracha, Matloob & Quillin, Bryce, 2009. "Remittances, Institutions, and Economic Growth," World Development, Elsevier, vol. 37(1), pages 81-92, January.
    11. repec:dgr:rugggd:gd-100 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    bank efficiency; economic growth; financial development; migrants' remittances;

    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, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:anc:wmofir:28. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maurizio Mariotti). General contact details of provider: http://edirc.repec.org/data/mfancit.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.