Rural Household Contribution to the Financial and Capital Market in Bangladesh: A Micro Level Study of Remittances from Italy

Mannan, Kazi Abdul and Farhana, Khandaker Mursheda (2014): Rural Household Contribution to the Financial and Capital Market in Bangladesh: A Micro Level Study of Remittances from Italy. Published in: International Journal of Management Sciences and Business Research , Vol. 3, No. 10 (1 November 2014): pp. 112-122.

Abstract

The present study investigates the investment variation of remittance determinants in rural area at the origin. Using micro-economic data from a survey conducted in 2013, multivariate analysis was carried out on 300 rural households. The empirical results show that the significance level and determinants vary from the investment in financial sector and specially investment in share market. Investment in financial sectors is strongly significance with the household remittances, educational level of migrants and household heads, household head relation to migrant and income of the household. On the other hand, investment in share market is highly significant with the duration of migration, marital status and employment status of the household head; and religion and income of the household.

• Item Type: MPRA Paper
• Language: English
• Keywords: capital market, remittances, investment, rural household, non-residence
• Subjects: D - Microeconomics > D0 - General; D - Microeconomics > D0 - General > D00 - General; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E66 - General Outlook and Conditions

References

Agarwal, R. and A.W. Horowitz. (1999). „Are International Remittances Altruism orInsurance? Evidence from Guyana Using Multiple-Migrant Households”, World Development, Vol. 30, pp. 2033-2044.

Barth, James R., McCarthy, Donald, Phumiwasana and Yago, Gleen.(2006). „Opportunities and Challenges in Asian Bond Markets‟ .In Asia‟s Debt Capital Markets , edited by Arner, Douglas, Park, Jaeha, Lejot, Paul and Liu, Qiao, Milken Institute, USA: 11-32.

Banerjee, B. (1984). „The probability, size and uses of remittances from urban to rural areas in India‟, Journal of Development Economics, 16, December, pp. 293-311.

Bencivenga, Valerie R., Smith, Bruce D. and Starr, Ross M. (1995). „Transactions Costs,Technological Choice, and Endogenous Growth‟. Journal of Economic Theory, 67(1), 53-177.

Bhide, Amar (1993). „The Hidden Costs of Stock Market Liquidity‟, Journal of Financial Economics, 34(2), 1- 51.

Cadge, Wendy and Ecklund, Elaine H. (2007). „Immigration and Religion‟ Annual Review of Sociology, Vol. 33.

Collier, William; Piracha, Matloob and Randazzo, Teresa. (2011). „Remittances and Return Migration‟, Discussion Paper series, Forschungsinstitut zur Zukunft der Arbeit, No. 6091.

Demirguc-Kunt, Asli and Vojislav Kamsimovic. (1998). „Law, Finance, and Firm Growth‟. Journal of Finance, December.

Fonchamnyo, Dobdinga Cletus. (2012),‟ The Altruistic Motive of Remittances A Panel Data Analysis of Economies in Sub Saharan Africa‟, International Journal of Economics and Finance, Vol. 4, No. 10, Canadian Center of Science and Education.

Greenwood, Jeremy, and Bruce Smith (1997). „Financial Markets in Development and the Development of Financial Markets‟, Journal of Economic Dynamics and Control, 21 , 145-82.

Gerber, Alan; Gruber, Jonathan and Hungerman, Daniel. (2008). „Does Church Attendance Cause People To Vote? Using Blue Laws' Repeal To Estimate The Effect Of Religiosity On Voter Turnout” NBER Working Paper Series. Working Paper 14303

Herring, R. and Chatusripitak, N. (2001). „The Case of Missing Market: The Bond Market and Why It Matters for Financial Development‟, Wharton Financial Institutions Centre working paper, University of Pennsylvania. 1-61.

Jensen, Michael C, and Murphy, Kevin J. (1990).„Performance Pay and Top Management Incentives," Journal of Political Economy, 98 , 225-64.

Kelly, Claudia Smith and Solomon Blen. (2009). „The Influence Of Religion On Remittances Sent To Relatives And Friends Back Home‟, Journal of Business & Economics Research, Volume 7, Number 1.

Krejcie, R. V., & Morgan, D. W. (1970) „Determining sample size for research activities‟, Educational and Psychological Measurement, 30, 607-610.

Lucas, R. E. B., & Stark, O. (1985). „Motivations to remit: Evidence from Botswana‟, The Journal of Political Economy, 901-918.

McDonald, James Ted and Valenzuela, Rebecca Ma. (2012). „Why Filipino Migrants Remit Evidence from a Home-Host Country Matched Sample‟, Monash University, Department of Economics, Discussion Papers No. 9/12.

Nakamura, Masao (2002). „Mixed Ownership of Industrial Firms in Japan: Debt Financing, Banks and Vertical Keiretsu Groups,‟ Economic System, 26, 231-247.

Pfau, W. D., and L. T. Giang. (2008). „Determinants and Impacts of International Remittances on Household Welfare in Vietnam‟, International Social Science Journal. Vol. 60, No. 194.

Quartey, P. (2006). „The impact of migrant remittances on household welfare in Ghana‟, (Vol. 158): African Economic Research Consortium.

Ryrie, William.(1991). “Stock markets and their role in economic development,” The Stock Exchange Review.

Stark, Oded and Lucas, Robert E. B. (1988). „Migration Remittances Family‟, Economic Development and Cultural Change, Vol. 36, No. 3, pp. 465-481.

Stark, O., J. E. Taylor, and S. Yitzhaki. (1986)."Remittances and Inequality‟, Economic Journal, 96:722-41.

Stark , Oded and Taylor. (1989). „Relative deprivation and international migration‟, Demography (26): 1-14.

Shleifer, Andrei and Vishny, Robert W. (1986). „Large Shareholders and Corporate Control‟ Journal of Political Economy, 96(3), 461-88.

Stiglitz, J. (1993). “The Role of the State in Financial Markets,” Proceedings of the Annual Bank Conference on Development Economics, pp. 19-52.

Vete MF. (2005). „The determinants of remittances amongst Tongans in Auckland‟, Asian and Pacific Migration Journal 4:55-68.