IMPACT OF REMITTANCES ON PRIVATE SECTOR CREDIT IN THE PACIFIC ISLAND COUNTRIES

Hong Chen (), Shamal Chand () and Baljeet Singh ()
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Hong Chen: Fujian University of Technology
Shamal Chand: The University of the South Pacific
Baljeet Singh: The University of the South Pacific

Bulletin of Monetary Economics and Banking, 2020, vol. 23, issue Special Issue, 15-32

Abstract: We examine the effect of remittances on private sector credit in the Pacific Island countries (PICs) using the data from 58 developing countries from 2004 to 2016. The analysis provides strong evidence that the effect of remittance inflows on private sector credit for PICs is positive and higher than that for other developing countries. In addition, the per capita gross domestic product, official development assistance, the number of bank branches, and institutional quality are also positively associated with private sector credit in PICs, while the Consumer Price Index is negatively associated with private sector credit. These results have important implications for the development of financial sector in PICs.

Keywords: Remittances; Private sector credit; System GMM estimator (search for similar items in EconPapers)
JEL-codes: E51 F24 O16 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:idn:journl:v:23:y:2020:i:spb:p:15-32

DOI: 10.21098/bemp.v23i0.1215

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