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Effect of remittance-sending countries' type on financial development in recipient countries: can the pandemic make a difference?

This study examines the effect of remittances on selected recipient countries’ financial development. Using weights for bilateral remittances from 1990 to 2015, this study calculates the weighted gross national income per capita of remittance-sending countries. This study then uses the weighted gros...

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Main Authors: Forhad, Md. Abdur Rahman, Alam, Gazi Mahabubul, Rahman, Md. Toabur
Format: Article
Language:English
Published: Multidisciplinary Digital Publishing Institute 2023
Online Access:http://psasir.upm.edu.my/id/eprint/107525/1/Effect%20of%20Remittance-Sending%20Countries%20Type%20on%20Financial%20Development%20in%20Recipient%20Countries.pdf
http://psasir.upm.edu.my/id/eprint/107525/
https://www.mdpi.com/1911-8074/16/4/229
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spelling my.upm.eprints.1075252024-10-17T07:22:29Z http://psasir.upm.edu.my/id/eprint/107525/ Effect of remittance-sending countries' type on financial development in recipient countries: can the pandemic make a difference? Forhad, Md. Abdur Rahman Alam, Gazi Mahabubul Rahman, Md. Toabur This study examines the effect of remittances on selected recipient countries’ financial development. Using weights for bilateral remittances from 1990 to 2015, this study calculates the weighted gross national income per capita of remittance-sending countries. This study then uses the weighted gross national income as an instrument to address the endogeneity between remittance and financial development. Using the instrument variable (IV) model, this study finds that remittances from low-skilled migrant-abundant sending countries have different effects than the highly skilled labor-abundant sending countries. Assuming the Gulf Cooperation Council (GCC) countries as a source of low-skilled and the Group of Seven (G7) as the source of high-skilled labor-abundant sending countries, remittance from relatively low-skilled emigrants has a greater impact on financial inclusion in the recipient countries than their high-skilled counterparts. In contrast, remittance from high-skilled countries has a greater impact on the development of the stock market. Similar types of effects of remittance on financial development have also been observed during the COVID-19 pandemic. The results suggest that policymakers should provide better foreign employment opportunities and improved transaction and investment policies in the home financial markets. Multidisciplinary Digital Publishing Institute 2023-04-04 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/107525/1/Effect%20of%20Remittance-Sending%20Countries%20Type%20on%20Financial%20Development%20in%20Recipient%20Countries.pdf Forhad, Md. Abdur Rahman and Alam, Gazi Mahabubul and Rahman, Md. Toabur (2023) Effect of remittance-sending countries' type on financial development in recipient countries: can the pandemic make a difference? Journal of Risk and Financial Management, 16 (4). art. no. 229. pp. 1-16. ISSN 1911-8066; ESSN: 1911-8074 https://www.mdpi.com/1911-8074/16/4/229 10.3390/jrfm16040229
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description This study examines the effect of remittances on selected recipient countries’ financial development. Using weights for bilateral remittances from 1990 to 2015, this study calculates the weighted gross national income per capita of remittance-sending countries. This study then uses the weighted gross national income as an instrument to address the endogeneity between remittance and financial development. Using the instrument variable (IV) model, this study finds that remittances from low-skilled migrant-abundant sending countries have different effects than the highly skilled labor-abundant sending countries. Assuming the Gulf Cooperation Council (GCC) countries as a source of low-skilled and the Group of Seven (G7) as the source of high-skilled labor-abundant sending countries, remittance from relatively low-skilled emigrants has a greater impact on financial inclusion in the recipient countries than their high-skilled counterparts. In contrast, remittance from high-skilled countries has a greater impact on the development of the stock market. Similar types of effects of remittance on financial development have also been observed during the COVID-19 pandemic. The results suggest that policymakers should provide better foreign employment opportunities and improved transaction and investment policies in the home financial markets.
format Article
author Forhad, Md. Abdur Rahman
Alam, Gazi Mahabubul
Rahman, Md. Toabur
spellingShingle Forhad, Md. Abdur Rahman
Alam, Gazi Mahabubul
Rahman, Md. Toabur
Effect of remittance-sending countries' type on financial development in recipient countries: can the pandemic make a difference?
author_facet Forhad, Md. Abdur Rahman
Alam, Gazi Mahabubul
Rahman, Md. Toabur
author_sort Forhad, Md. Abdur Rahman
title Effect of remittance-sending countries' type on financial development in recipient countries: can the pandemic make a difference?
title_short Effect of remittance-sending countries' type on financial development in recipient countries: can the pandemic make a difference?
title_full Effect of remittance-sending countries' type on financial development in recipient countries: can the pandemic make a difference?
title_fullStr Effect of remittance-sending countries' type on financial development in recipient countries: can the pandemic make a difference?
title_full_unstemmed Effect of remittance-sending countries' type on financial development in recipient countries: can the pandemic make a difference?
title_sort effect of remittance-sending countries' type on financial development in recipient countries: can the pandemic make a difference?
publisher Multidisciplinary Digital Publishing Institute
publishDate 2023
url http://psasir.upm.edu.my/id/eprint/107525/1/Effect%20of%20Remittance-Sending%20Countries%20Type%20on%20Financial%20Development%20in%20Recipient%20Countries.pdf
http://psasir.upm.edu.my/id/eprint/107525/
https://www.mdpi.com/1911-8074/16/4/229
_version_ 1814054644963344384
score 13.211869

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