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Table 1 Summary of International Empirical Evidence on remittances-financial development relationship

From: Do migrant remittances matter for financial development in Kenya?

Year Author/s Country/ies Data Methodology Findings
2016 Karikari et al. 50 Developing countries in Africa 1990–2011 Fixed Effects; Random Effects and Vector Error Correction Model Remittances have a positive effect on financial development in the short run but a negative effect in the long run.
2016 Muktadir-Al-Mukit and Islam Bangladesh 1976–2012 VAR and VECM There is a positive relationship between remittances and credit disbursement in the long run. Bi-directional causality is also established
2016 Ambrosius and Cuecuecha Mexico Household survey data (2002; 2005) Fixed effects and instrumental variables There are positive effects of remittances on the ownership of savings account, existence of debts and borrowing.
2016 Williams Sub-Saharan Africa 1970–2013 Panel data Remittances positively influence financial development
2015 Mbaye Senegal Household survey data (May–July 2009; April–June 2011) Household fixed effects model Receipt of remittances increases likelihood of having a loan in a household.
2015 Coulibaly Sub-Saharan Africa 1980–2010 Panel granger causality No strong evidence supporting the view that remittances affect financial development or vice versa.
2014 Anzoategai et al. Elsavador 1995–2001, four wave rural household level survey data Fixed effects Households that receive remittances are more likely to have a deposit account at a financial institution.
2014 Ojapinwa and Oladipo 32 SSA countries 1996–2010 Dynamic panel GMM Remittances affect financial development in a positive and significant way implying that remittances complement financial intermediation in SSA countries.
2013 Brown et al. Developing countries 1970–2005 Panel Least Squares, 2SLS and Probit approaches Remittances flows do not induce opening of bank accounts or increase in credit to the private sector.
2012 Nyamongo et al. Africa 1980–2009 Panel data approaches Remittances are complementary to financial development and are an important source of economic growth.
2011 Motelle Lesotho   Vector Error Correction Model and Causality tests Remittances have a long-run effect on financial development. Causality is established from financial development to remittances but not vice versa
2009 Giuliano and Ruiz-Arranz 100 developing countries 1975–2002 System GMM; OLS and Fixed Effects Remittances provide an alternative way to finance investment and help overcome liquidity constraints.
2009 Gupta et al. Sub Saharan Africa 1975–2004 Three stage least squares Remittances have a direct poverty mitigating effect and promotes financial development.
2009 Beine et al. 66 developing countries 1980–2005 Dynamic generalized ordered logit model A strong positive effect of remittances on financial openness.
2008 Toxopeus and Lensinki Developing countries 2003 OLS Remittance flows have a significant positive effect on financial inclusion in developing countries.
2011 Aggarwal et al. 99 Developing countries 1975–2003 GMM Impact of remittances on financial development is positive though marginal.