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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| Format: | Article |
| Language: | English |
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Multidisciplinary Digital Publishing Institute
2023
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| Online Access: | http://psasir.upm.edu.my/id/eprint/107525/ http://psasir.upm.edu.my/id/eprint/107525/1/Effect%20of%20Remittance-Sending%20Countries%20Type%20on%20Financial%20Development%20in%20Recipient%20Countries.pdf |
| _version_ | 1848864919556980736 |
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| author | Forhad, Md. Abdur Rahman Alam, Gazi Mahabubul Rahman, Md. Toabur |
| author_facet | Forhad, Md. Abdur Rahman Alam, Gazi Mahabubul Rahman, Md. Toabur |
| author_sort | Forhad, Md. Abdur Rahman |
| building | UPM Institutional Repository |
| collection | Online Access |
| 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. |
| first_indexed | 2025-11-15T13:56:28Z |
| format | Article |
| id | upm-107525 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T13:56:28Z |
| publishDate | 2023 |
| publisher | Multidisciplinary Digital Publishing Institute |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-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 |
| 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? |
| title | 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_short | 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? |
| url | http://psasir.upm.edu.my/id/eprint/107525/ http://psasir.upm.edu.my/id/eprint/107525/ http://psasir.upm.edu.my/id/eprint/107525/ http://psasir.upm.edu.my/id/eprint/107525/1/Effect%20of%20Remittance-Sending%20Countries%20Type%20on%20Financial%20Development%20in%20Recipient%20Countries.pdf |