TITLE:
Non-Linear Effect of Remittances on Banking Sector Development: Panel Evidence from Developing Countries
AUTHORS:
Yaya Keho
KEYWORDS:
Remittances, Financial Development, Quantile Regression, Developing Countries
JOURNAL NAME:
Theoretical Economics Letters,
Vol.6 No.5,
October
12,
2016
ABSTRACT: This paper examines the impact of remittances on
financial sector development in a panel of 19 developing countries. Contrary to
previous studies that focus on mean effects, it uses quantile regression
methodology to examine whether the effect of remittances on financial development
is the same for less and more financially developed countries. The results
point out that remittances promote financial development only in less
financially developed countries. Further, the effect of income is positive and
larger in less financially developed countries. Trade openness is positively
related to financial development while inflation and urbanization are
negatively related to it.