Migrants' remittances and financial development: macro- and micro-level evidence of a perverse relationship

Brown, Richard P. C., Carmignani, Fabrizio and Fayad, Ghada (2013) Migrants' remittances and financial development: macro- and micro-level evidence of a perverse relationship. World Economy, 36 5: 636-660. doi:10.1111/twec.12016


Author Brown, Richard P. C.
Carmignani, Fabrizio
Fayad, Ghada
Title Migrants' remittances and financial development: macro- and micro-level evidence of a perverse relationship
Journal name World Economy   Check publisher's open access policy
ISSN 0378-5920
1467-9701
Publication date 2013-05-01
Sub-type Article (original research)
DOI 10.1111/twec.12016
Volume 36
Issue 5
Start page 636
End page 660
Total pages 25
Place of publication Chichester, West Sussex, United Kingdom
Publisher Wiley-Blackwell
Language eng
Abstract Financial development is commonly identified as an important condition for fostering investment and economic growth. It is also believed that migrants' remittances stimulate financial development in the receiving economy, contributing indirectly to economic growth. We explore the relationship between remittances and financial development using macro- and micro-level data. From cross-country panel data, we find evidence of a negative relationship between remittances and financial deepening in developing countries. Using household survey data from a study of migrants' remittances in two CIS countries, Azerbaijan and Kyrgyzstan, we also investigate the relationship between remittances, financial intermediation and 'financial literacy' among remittance-receiving households. While we find some evidence of a positive, albeit weak, relationship for Kyrgyzstan, in Azerbaijan, the relatively more financially developed economy, we uncover a strong perverse relationship. Remittances appear to deter bank intermediation and use of formal banking services. Possible reasons are explored and areas for further investigation identified.
Keyword International Migration
Economy
Growth
Performance
Countries
Poverty
Welfare
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2014 Collection
School of Economics Publications
 
Versions
Version Filter Type
Citation counts: TR Web of Science Citation Count  Cited 8 times in Thomson Reuters Web of Science Article | Citations
Scopus Citation Count Cited 7 times in Scopus Article | Citations
Google Scholar Search Google Scholar
Created: Sun, 09 Jun 2013, 10:30:42 EST by System User on behalf of School of Economics