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Impact Of Remittances On Private Sector Credit In The Pacific Island Countries

Author

Listed:
  • Hong Chen

    (Fujian University of Technology)

  • Shamal Chand

    (The University of the South Pacific)

  • Baljeet Singh

    (The University of the South Pacific)

Abstract

We examine the effect of remittances on private sector credit in the Pacific Island countries (PICs) using the data from 58 developing countries from 2004 to 2016. The analysis provides strong evidence that the effect of remittance inflows on private sector credit for PICs is positive and higher than that for other developing countries. In addition, the per capita gross domestic product, official development assistance, the number of bank branches, and institutional quality are also positively associated with private sector credit in PICs, while the Consumer Price Index is negatively associated with private sector credit. These results have important implications for the development of financial sector in PICs.

Suggested Citation

  • Hong Chen & Shamal Chand & Baljeet Singh, 2020. "Impact Of Remittances On Private Sector Credit In The Pacific Island Countries," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 23(Special I), pages 15-32, January.
    • Handle: RePEc:idn:journl:v:23:y:2020:i:spb:p:15-32
    DOI: https://doi.org/10.21098/bemp.v23i0.1215
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    More about this item

    Keywords

    Remittances; Private sector credit; System GMM estimator;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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