Remittance inflows and financial development in Sub-Saharan African countries: Does governance matter?

Odhiambo, N.M.; Musakwa, Mercy T.

doi:10.1016/j.heliyon.2024.e26953

Heliyon

2024

DOI: 10.1016/j.heliyon.2024.e26953

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Remittance inflows and financial development in Sub-Saharan African countries: Does governance matter?

N.M. Odhiambo,

Mercy T. Musakwa

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2024

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Cited by 2 publications

References 35 publications

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Complementarity effects of financial development and remittance on agricultural production in Africa

Raifu,

Afolabi

2024

JEAS

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PurposeEmpirical evidence abounds on the individual effect of financial development and remittances on agricultural production, but little is known about their complementary role, especially in the context of African countries. This study fills this knowledge gap by examining the moderating role of financial development in the agricultural production–remittance nexus in Africa.Design/methodology/approachDifferent measures of financial development were employed, and the panel quantile regression model was adopted to analyse panel data of 33 African countries covering the period 2005–2020.FindingsThe results indicate that the effects of financial development on agricultural production vary across quantiles, and the dynamics of agricultural production are sensitive to the choice of financial development indicator. Nevertheless, financial development and remittances are highly indispensable for improved agricultural production in Africa, as financial development complements the positive effect of remittances on agricultural production.Practical implicationsAfrican countries need to strengthen their financial sector to facilitate the effective mobilization of remittances and other financial resources for investment in the agricultural sector and the improvement of the sector’s productivity.Originality/valueTo the best of our knowledge, this is the first study that documents empirical evidence on the complementary role of financial development and remittances on agricultural production in Africa.

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Complementarity effects of financial development and remittance on agricultural production in Africa

Raifu,

Afolabi

2024

JEAS

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The absorptive capacity of the institution in the link between remittances and financial development in Africa: an advance panel regression

Dada,

Awoleye,

Al-Faryan

et al. 2024

JFEP

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Purpose The purpose of this study is to examine institutional quality’s absorptive capacity in African countries’ remittances-finance nexus. Design/methodology/approach A balanced panel data set of thirty African countries between 2000 and 2022 is used for the study. The study adopts an augmented mean group (AMG), method of moment quantile regression (MMQR) and two-step system generalized method of moment (2SGMM) as the estimation techniques due to the nature of the data set. Findings The findings of the direct effect reveal that remittances do not constitute the growth of financial development, while institutional quality promotes the growth of financial development in the long. The moderating effect of institutional quality in the linkages shows that the interactive term of institutional quality and remittances has a significant positive effect on financial development in the region. Hence, institutional quality moderates the impact of remittances. These results are robust to different proxies of financial development and estimates obtained from MMQR and 2SGMM. Practical implications This study, therefore, suggests that institutional quality is essential in the linkages between remittances and financial development. Hence, remittances should be seen as one of the instruments that can be used to develop the financial sector rather than survival mechanisms for households. Originality/value This study contributes to the literature by unearthing the absorptive capacity of institutional quality in the nexus between remittances and financial development in African countries, which extant studies have neglected.

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Remittance inflows and financial development in Sub-Saharan African countries: Does governance matter?

Cited by 2 publications

References 35 publications

Complementarity effects of financial development and remittance on agricultural production in Africa

Complementarity effects of financial development and remittance on agricultural production in Africa

The absorptive capacity of the institution in the link between remittances and financial development in Africa: an advance panel regression

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