Remittances and Financial Development:;Substitutes or Complements in Economic Growth?
Giulia Bettin () and
Alberto Zazzaro ()
No 28, Mo.Fi.R. Working Papers from Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences
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.
Keywords: bank efficiency; economic growth; financial development; migrants' remittances (search for similar items in EconPapers)
JEL-codes: F22 F43 O16 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-fdg and nep-mig
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Journal Article: REMITTANCES AND FINANCIAL DEVELOPMENT: SUBSTITUTES OR COMPLEMENTS IN ECONOMIC GROWTH? (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:anc:wmofir:28
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