Studies on the role of remittances received on the recipient country�s\r\nfinancial development have given mixed results. The most notable empirical\r\nstudies try to assess this relation for a group of countries using panel data. In\r\nthis study we concentrate on the relation between these two variables for the\r\npost-communist Albania using annual time series data provided by the World\r\nBank. The multiple regression model developed is estimated using the\r\nARDL bounds testing approach which is highly recommended when the\r\nsample size is small. Results indicate a significant positive role of\r\nremittances in the country�s financial development. In particular, a 10%\r\nincrease in remittances is associated with approximately a 11.78% increase\r\nin the financial development. Other financial development enhancing\r\nvariables are trade openness and the sum of foreign direct investment and\r\nofficial development assistance, although with a smaller impact.
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