Role of Financial Sector Development as a Contingent Factor in the Remittances and Growth Nexus: A Panel Study of Pacific Island Countries

Jayaraman, Tiruvalangadu K.; Lau, Lin Sea; Ng, Cheong Fatt

doi:10.33182/rr.v3i1.426

Cited by 12 publications

(12 citation statements)

References 26 publications

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“…Our finding is supported by Chakraborty and Nunnenkamp 39 and Duan et al 38 who suggest that FDI does not play an essential role in contributing to output growth. However, it is contradictory with the findings of Amri 35 and Jayaraman et al, 53 who claims that FDI and economic growth are positively related. The positive linkage between FDI and economic growth can be explained by both the endogenous and exogenous growth theories.…”

Section: Resultscontrasting

confidence: 56%

Does energy efficiency affect economic growth? Evidence from aggregate and disaggregate levels

Lau

Yii

et al. 2019

Energy & Environment

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This paper empirically examines the relationship between energy efficiency, CO2 emissions, foreign direct investment, exports, and real gross domestic product at both aggregate and disaggregate levels in Malaysia based on an autoregressive distributed lag approach. The annual data for the period of 1971–2013 are employed. The results indicate that energy efficiency Granger causes economic growth at the aggregate level, but not in each of the three main sectors (primary, secondary, and tertiary) of the economy. Another important finding of the study is that the export-led growth hypothesis is found to be valid in Malaysia at both the aggregate and disaggregate levels. The results of our study also confirm the fact that CO2 emissions do affect the overall economic performance and growth in all sectors, except for the primary sector. This finding implies that pollution from both secondary and tertiary sectors has led to economic growth in Malaysia. Moreover, it is also discovered that foreign direct investment does not have a significant impact on economic growth in Malaysia. The results of this study are essential for policymakers of Malaysia in designing appropriate policies in each sector that can lead to robust growth in the country. In addition to focusing on enhancing energy efficiency and promoting foreign direct investment, the policymakers should also start to look for alternative strategies to ensure long-term economic growth in the country.

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Section: Resultscontrasting

confidence: 56%

Does energy efficiency affect economic growth? Evidence from aggregate and disaggregate levels

Lau

Yii

et al. 2019

Energy & Environment

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“…The official channels allow transfers to be remitted through the domestic banking system and/or money-transfer organisations whereas the unofficial channels remit mainly in cash or in-kind through the use of carriers such as family members or friends; money or goods taken by the migrant on his/her seasonal visits to his/her home country and; funds remitted through other unlicensed money transfer operators (hawala system). However, transfers through unofficial channels are far more expensive (Jayaraman et al, 2018); it is also higher than the former.…”

Section: Conceptual Review Of Remittances Literaturementioning

confidence: 99%

“…Furthermore, the remittances-financial development conditioning term showed that the two variables act as substitutes. Jayaraman et al (2018) assessed the role of financial sector development in the relationship between remittances and economic growth for a panel dataset of five Pacific Island countries over the period 1997-2014. Through the results of Dynamic Ordinary Least Square (DOLS), the study showed that remittances and financial sector development are substitutes for economic growth.…”

Section: Empirical Reviewmentioning

confidence: 99%

“…The growth effects of remittances inflows can be multiplied with the help of banking remittance recipients through formal remitting channels (Hinojosa-Ojeda, 2003;World Bank, 2006). The effect can further be enhanced if savings made by these recipients out of their remittances are pooled together by institutions in the financial sector, precisely banks for recycling them as credit to the private sector (Jayaraman, Lau & Ng, 2018). Bank financial institutions play a key function by facilitating credit flow from the savers' side to the users' group in an economy, and in that process, they create a multiplicity of investments, which serve as one of the drivers of economic growth (Kolapo, Oke & Olaniyan, 2018).…”

Section: Introductionmentioning

confidence: 99%

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Interactive Effects of Remittances and Financial Sector Development on Economic Growth in Nigeria

Olaniyan¹

2019

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A well-developed and efficient financial sector together with remittances can serve as a transmission mechanism to ensure well-rounded economic growth because extant literature shows that remittances alone may not be sufficient to promote the desirable level of economic growth. Therefore, this study investigated the interactive effects of remittances and financial sector development on economic growth in Nigeria for the period 1977-2017. The data for this study was obtained from the World Bank’s World Development Indicator (WDI) Database. The data were analysed using the Instrumental Variable Generalised Method of Moments (IV-GMM) estimator. The findings of this study showed that remittances alone had a negatively significant effect on economic growth at 1% significance level but when interacted with financial sector development, they enhance economic growth as revealed by the positive coefficient of the interactive term which is also significant at 1% level. The study concluded that Nigeria’s economy profits from migrants’ remittances in terms of economic growth through the existence of a developed financial sector. This study recommended among other things that the interaction of remittances and financial sector development should be used as an avenue to encourage more savings from remittances by lowering transaction costs and increasing payment of deposits’ interest on remitted funds. Besides, bank financial institutions should find a better match for these savings (in terms of investment opportunities) in order to neutralise the negative effects of remittances on economic growth caused by recipients’ consumption smoothing drive.

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“…Financial inclusion further facilitates the all types of foreign inflows either remittances or bonds or portfolio or direct investment. (Alfaro et al, 2004;Jayaraman et al, 2018;Toxopeus & Lensink, 2008). While lack of financial inclusion may lead to continuous income inequality, enhance poverty level, and lower economy growth .…”

Section: Introductionmentioning

confidence: 99%

Financial literacy, financial self-efficacy and financial account ownership behavior in Pakistan

Noor

Batool

Arshad

2020

Cogent Economics & Finance

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Study examines the role of financial literacy and financial self-efficacy of individuals in explaining their behavior to have financial accounts. Study has used the questionnaire based survey and collected the data responses from 564 adults belonging to Sahiwal division. The binary logistic regression model is utilized to estimate the probability of having financial accounts in relation to individual's financial literacy and financial self-efficacy level. Estimated results show that individual's financially literacy level is positively related with individual's account ownership model among the selected group. While individual's financial self-efficacy level does not explain any positive significant impact on individual's account ownership model. Other socio-demographic variables like gender, marital status, education, occupation, and income level are also found to have influential impact on the individuals' account ownership behavior in Pakistan. Study recommends that financial literacy is pertinent to have equitable financial inclusion in the economy.

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Role of Financial Sector Development as a Contingent Factor in the Remittances and Growth Nexus: A Panel Study of Pacific Island Countries

Cited by 12 publications

References 26 publications

Does energy efficiency affect economic growth? Evidence from aggregate and disaggregate levels

Does energy efficiency affect economic growth? Evidence from aggregate and disaggregate levels

Interactive Effects of Remittances and Financial Sector Development on Economic Growth in Nigeria

Financial literacy, financial self-efficacy and financial account ownership behavior in Pakistan

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