IMPACT OF REMITTANCES ON PRIVATE SECTOR CREDIT IN THE PACIFIC ISLAND COUNTRIES

  • Hong Chen Fujian University of Technology
  • Shamal Chand The University of the South Pacific
  • Baljeet Singh The University of the South Pacific
Keywords: Remittances, Private sector credit, System GMM estimator

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.

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Author Biographies

Hong Chen, Fujian University of Technology

Dr. Hong Chen is Professor atĀ Fujian University of Technology, China.

Shamal Chand, The University of the South Pacific

Mr. Shamal is graduate assistant at the University of the South Pacific.

Published
2020-01-31
How to Cite
Chen, H., Chand, S., & Singh, B. (2020). IMPACT OF REMITTANCES ON PRIVATE SECTOR CREDIT IN THE PACIFIC ISLAND COUNTRIES. Buletin Ekonomi Moneter Dan Perbankan, 23, 13 - 32. https://doi.org/10.21098/bemp.v23i0.1215