Remittances and banking sector breadth and depth: evidence from Mexico

Asli Demirguc-Kunt, Ernesto Lopez Cordova, Maria Soledad Martinez Peria and Christopher Woodruff
Authors registered in the RePEc Author Service: José Ernesto López-Córdova ()

No 4983, Policy Research Working Paper Series from The World Bank

Abstract: Despite the rising volume of remittances flowing to developing countries, their impact on banking sector breadth and depth in recipient countries has been largely unexplored. The authors examine this topic using municipio-level data on the fraction of households that receive remittances and on measures of banking breadth and depth for Mexico. They find that remittances are strongly associated with greater banking breadth and depth, increasing the number of branches and accounts per capita and the ratio of deposits to gross domestic product. These effects are significant both statistically and economically, even after conducting robustness tests and addressing the potential endogeneity of remittances.

Keywords: Access to Finance; Banks&Banking Reform; Population Policies; Debt Markets (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-dev and nep-mig
Date: 2009-06-01
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