Remittances and credit in developed and developing countries: A dynamic panel analysis

Vincent Fromentin () and Florian Leon

Research in International Business and Finance, 2019, vol. 48, issue C, 310-320

Abstract: This article investigates the impact of remittances on credit in 30 developing (low and middle income) countries and 27 developed (high-income) countries during the period of 2000-2014. This paper differs from existing literature in two ways. First, we distinguish the impact of remittances on credit in both the short run and the long run. Second, we investigate whether remittances influence credit provided to households and credit provided to firms differently, thanks to a new dataset. Our results indicate that (i) remittances have a positive impact on credit in the long run but no impact in the short run; (ii) remittances have a stronger effect on household credit than on firm credit in developing countries; and, (iii) remittances stimulate credit provision through firm credit in developed countries.

Keywords: Remittances; Financial development; Household credit; Firm credit; PMG estimator (search for similar items in EconPapers)
JEL-codes: E51 F24 G21 O11 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (10)

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Working Paper: Remittances and credit in developed and developing countries: A dynamic panel analysis (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:48:y:2019:i:c:p:310-320

DOI: 10.1016/j.ribaf.2018.12.010

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