The Role of Workers’ Remittances in Development of Jordanian Banking Sector

Al-Tarawneh, Alaaeddin

doi:10.11648/j.ijber.20160506.16

Cited by 5 publications

(1 citation statement)

References 18 publications

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“…Recent studies show that households who receive migrant remittances have greater access to healthcare services, have better educational opportunities, and have lower poverty levels [81,82]. Additionally, outside money movement may help create savings possibilities, increase deposits, and promote financial inclusion [83][84][85].…”

Section: Findings and Conclusionmentioning

confidence: 99%

The Role of Remittances on Financial Development through Capital Formation and FDI Channels: A Symmetric and Asymmetric Investigation for Selected South Asian Countries

Qamruzzaman¹,

Kler²

2021

ujaf

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The motivation of the study is to gauge the asymmetric effects of remittances (R), gross capital formation (GCF), and FDI on financial development (FD) in Bangladesh, India, Pakistan, and Srilanka spanning the period 1978-2018. The study applied unit root tests, including DF-GLS and Zivot-Andrew, ARDL bound test, tBDM test, Bayer and Hanck combined cointegration test, nonlinear ARDL (NARDL) for asymmetry, and, finally, directional causal effects evaluated with the Toda-Yamamoto causality test. ARDL bound testing documents the long-run association between R, GCF, FDI, and FD, valid for sample countries. Additionally, remittance elasticity exposes a positive, statistically significant linkage with financial development in the long run and short run. The standard Wald test reveals that the test statistics are statistically significant at 1% level, suggesting the asymmetric association between financial development and explanatory variables. The asymmetric association is valid both in the long-run and short-run. With the asymmetric effects of remittances, positive and negative shocks expose positive, statistically significant at a 1% level both in the long-run and short-run. However, in coefficient elasticities, harmful innovations are more critical to financial development than positive innovations in remittances. It suggests that policymakers have to make efforts to formulate policies that induce the migrants to send remittances to the economy. Finally, the directional causality test results disclosed unidirectional causality running from remittances to financial development.

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Section: Findings and Conclusionmentioning

confidence: 99%

The Role of Remittances on Financial Development through Capital Formation and FDI Channels: A Symmetric and Asymmetric Investigation for Selected South Asian Countries

Qamruzzaman¹,

Kler²

2021

ujaf

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Causal Linkage between Remittances and Financial Development: Evidence from the BRICS (Brazil, Russia, India, China, and South Africa)

Bindu

Sridharan

Swain

et al. 2021

Journal of East-West Business

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Do migrant remittances matter for financial development in Kenya?

Misati¹,

Kamau²,

Nassir³

2019

Financ Innov

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The paper analyzes the relationship between remittances and financial development using Kenyan quarterly data from 2006 to 2016. Five different indicators of financial development are used: credit to the private sector as a share of GDP, the number of mobile transactions, the value of these mobile transactions, the number of mobile agents, and the number of bank accounts. The results from using an autoregressive distributed lag demonstrate a strong, positive relationship between remittances and financial development in long-run equations. This suggests that higher levels of remittances provide opportunities for recipients to open bank accounts, enhance their savings, and access financial systems, in addition to exposing the previously unbanked to both new and existing financial products. The results also confirm the potential advantage of embracing modern and advanced technology to facilitate international mobile transfers. Using international remittance transfers through mobile technology reduces costs by eliminating the need for physical branches and personnel to attend to walk-in customers. Aside from offering convenience and safety for remittance actors, this method also dominates traditional remittance business models. Therefore, a policy window exists for the government to leverage on remittances as a tool of financial inclusion and depth, and particularly through the continued expansion of regulatory space to accommodate the wider use of international mobile remittance transfer channels. Moreover, given the strong, positive relationship between remittances and credit to the private sector as indicated by its share of GDP and number of bank accounts, commercial banks and other players in the remittance market may also find it useful to develop customized products for migrants to access their remittances. For example, financial intermediaries can consider providing better deposit interest rates for diaspora deposits compared to deposits made in the local currency. Further, these institutions can allow regular remittance flows to act as collateral for the allocation of credit, among other incentives to tap into the significant potential of money remitted by migrants to Kenya. The study also recommends that the government consider expanding exploitation of diaspora bonds and diaspora savings and credit cooperative societies while drawing lessons from other countries' previous attempts.

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The Role of Workers’ Remittances in Development of Jordanian Banking Sector

Cited by 5 publications

References 18 publications

The Role of Remittances on Financial Development through Capital Formation and FDI Channels: A Symmetric and Asymmetric Investigation for Selected South Asian Countries

The Role of Remittances on Financial Development through Capital Formation and FDI Channels: A Symmetric and Asymmetric Investigation for Selected South Asian Countries

Causal Linkage between Remittances and Financial Development: Evidence from the BRICS (Brazil, Russia, India, China, and South Africa)

Do migrant remittances matter for financial development in Kenya?

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