Determinants and Macroeconomic Impact of Remittances in Sub-Saharan Africa

Singh, Raju; Lee, Kyung-woo; Haacker, Markus

doi:10.5089/9781451873634.001

Cited by 29 publications

(18 citation statements)

References 17 publications

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“…This indicates that sub-Saharan African migrants remit more when their income levels improve in the host country. This corroborates earlier findings by Singh et al (2010) that countries with more migrants in wealthy countries receive more remittance inflows than otherwise. The coefficient of financial deepening is positively signed and statistically significant at the 1per cent level.…”

Section: Resultssupporting

confidence: 93%

“…Secondly, financial deepening in the home country is a key factor to be considered if sub-Saharan African countries are to be able to harness remittances through formal channels for investment or development finance. This corroborates earlier findings by Singh et al (2010) and Gupta et al (2007) that countries with well-developed financial systems stand a better chance of attracting more remittance inflows through formal channels and thereon the opportunity to enhance the impact of remittances on development outcomes. The results of this study indicate that sub-Saharan African countries would be able to harness remittances as an alternative source of external finance for development if the right products and services are designed by financial service providers.…”

Section: Conclusion Policy Implications and Future Researchsupporting

confidence: 92%

“…The coefficient of financial deepening is positively signed and statistically significant at the 1per cent level. This is consistent with Gupta et al (2007) and Singh et al (2010).Thus the depth of the home country's financial sector (the quality of financial intermediation) is a key factor to be considered by sub-Saharan African countries in their efforts at directing remittances through formal channels and thereon for more productive uses. The coefficient of the interest rate differential is positively signed and statistically significant at the 1 per cent level.…”

Section: Resultssupporting

confidence: 62%

See 2 more Smart Citations

Harnessing Remittances through Formal Channels for Development in Sub-Saharan Africa

Kemegue¹,

Owusu-Sekyere²,

Eyden³

2014

jda

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This paper investigates how sub-Saharan African (SSA) countries could harness remittances through formal channels for development using annual data for 35 countries from 1980 to 2008.We control for country heterogeneity, endogeneity and cross-sectional dependence of the error term using the least square dummy variable (LSDV) estimator with Driscoll and Kraay (1998) corrected standard errors, the Kiviet (1995) bias-corrected LSDV estimator and feasible generalized least squares (FGLS) by Parks (1967) and Kmenta (1986). We find that financial deepening in the home country is critical to the use of formal channels and the ability of sub-Saharan African countries to harness remittances for development. Besides remitting home for altruistic reasons, sub-Saharan African migrants would also respond to investment opportunities in their home countries, contingent on a stable exchange rate. Sub-Saharan African migrants also remit more money home when their incomes increase in the host country.JEL Classifications: F22, F24, O55

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Section: Resultssupporting

confidence: 93%

Section: Conclusion Policy Implications and Future Researchsupporting

confidence: 92%

Section: Resultssupporting

confidence: 62%

See 1 more Smart Citation

Harnessing Remittances through Formal Channels for Development in Sub-Saharan Africa

Kemegue¹,

Owusu-Sekyere²,

Eyden³

2014

jda

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“…Despite the expected robust theoretical growth effects of remittances, recent empirical studies by Rao and Hassan (2011), Singh et al (2010), Giuliano and Ruiz-Arranz (2009), Chami et al (2005), Acosta et al (2008) and Adams and Page (2005) have produced mixed results. Some studies have produced results, which show a robust positive impact on growth, while others find insignificant and sometimes negative effects.…”

Section: Introductionmentioning

confidence: 89%

Remittances and the sources of growth

Senbeta

2013

Applied Economics Letters

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This article studies the effects of remittances on economic growth and the sources of growth:capital accumulation and Total Factor Productivity (TFP) growth. This approach is different from previous studies, in that, it focuses on the transmission mechanism instead of the impact of remittances on economic growth. We find that remittances have conflicting effects on the two sources of growth: capital accumulation and productivity growth. Remittances have a significantly positive impact on capital accumulation while the impact on TFP growth is insignificant. These findings suggest that while remittances enhance investment and contribute to physical capital accumulation, the lack of efficiency enhancing effect or possible adverse impact on TFP growth would make the net effect on economic growth ambiguous.

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“…Mahtab (2012), in his empirical research, found that income of household, household size do not influence foreign remittance sent by migrant workers but duration of staying abroad, exchange motive and investment motive do influence workers' remittance. Singh, Haacker, and Lee (2009) found that the wealthier the country of origin of the expatriates the higher the remittances they send back home. Naufal and Termos (2009) examined the responsiveness of remittances to oil price in GCC countries.…”

Section: Source Of Remittancementioning

confidence: 99%

Driving Forces of Remittance Inflow in Bangladesh: An Empirical Study

Islam¹,

Nasrin²

2015

IJEF

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This paper empirically investigates the major driving forces of remittance inflow in Bangladesh. Using annual data over the period from 1977 to 2011 the paper concludes that gross domestic products of host country and domestic country, exchange rate, petroleum price and skill of labour significantly influence remittance inflow in Bangladesh. One finding of the research is that skilled labour force rather sends smaller amount of remittance to the home country than the unskilled labour. This is due to the fact that skilled people do not maintain close tie with the home country because they often take their families with them to foreign countries where they work. Because of narrow opportunities, unskilled labour cannot take their families with them and hence send money to their families. The study also identifies the reason behind migration of manpower from Bangladesh to foreign countries. Presence of surplus labour, slim job opportunity, unfavourable working environment, poor wage rate, inadequate social security and political instability largely induce people to migrate abroad.

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Determinants and Macroeconomic Impact of Remittances in Sub-Saharan Africa

Abstract: This Working Paper should not be reported as representing the views of the IMF.

Cited by 29 publications

References 17 publications

Harnessing Remittances through Formal Channels for Development in Sub-Saharan Africa

Harnessing Remittances through Formal Channels for Development in Sub-Saharan Africa

Remittances and the sources of growth

Driving Forces of Remittance Inflow in Bangladesh: An Empirical Study

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