The Role of Workers’ Remittances in Development of Jordanian Banking Sector

This paper examines the impact of workers’ remittances on a key indicator of banking sector development using Jordanian data over the period 1964 to 2013. The results are obtained using cointegration analysis depending on the E-G procedure test within the ECM framework. The study has found evidence of significant positive effects of remittances on the credit to the private to GDP ratio. Any increase in the workers' remittances, increases the level of banking sector development. In addition, a test for asymmetric relationship between variables is implemented, and results show that this relation does not exist.