Remittances and banking sector breadth and depth: Evidence from Mexico

Asli Demirguc-Kunt, Ernesto López Córdova, María Soledad Martínez Pería and Christopher Woodruff

Journal of Development Economics, 2011, vol. 95, issue 2, 229-241

Abstract: Despite the importance of remittances to developing countries, their impact on banking sector breadth and depth in recipient countries has been largely unexplored. We examine this topic using municipality-level data on the fraction of households receiving remittances and on measures of banking breadth and depth for Mexico. We find that remittances are strongly associated with greater banking breadth and depth, increasing the number of branches and accounts per capita and the amount of deposits to GDP. These effects are significant both statistically and economically, and are robust to the potential endogeneity of remittances, inclusion of a wide range of controls and even municipal fixed effects specifications using an alternative panel data set from a sample of municipalities.

Keywords: Remittances; Financial; development; Banking; sector; depth; and; breadth (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (88)

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Working Paper: Remittances and banking sector breadth and depth: evidence from Mexico (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:95:y:2011:i:2:p:229-241

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