Role of Financial Sector in the Remittances-Growth Nexus in Fiji

Authors

  • Hong Chen China Institute of Economic Transformation and Opening, Sun Yat-Sen University, Guangzhou, China
  • T.K. Jayaraman College of Business, Hospitality and Tourism, Fiji National University, Nasinu Campus, Suva, Fiji Islands

Keywords:

Remittances, financial sector development, output, Fiji

Abstract

Amongst the three kinds of non-debt creating capital transfers, welcomed by capital-short Pacific island countries (PICs) for supplementing their limited domestic savings, remittances presently top the list, the other two being foreign aid and foreign direct investment. Remittances help poor families, reducing poverty. In the long run, however, the contribution of remittances to growth in output and economic development is contingent upon financial sector development (FSD). PICs are now fostering financial sector development by promoting greater financial inclusion. This paper seeks to assess the role of FSD in the nexus between remittances and output by undertaking an empirical study of Fiji.

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Published

2016-10-02

Issue

Vol. 1 No. 1 (2016)

Section

Articles