Remittance inflows and financial development: evidence from the top recipient countries in Sub-Saharan Africa

Donou‐Adonsou, Ficawoyi; Pradhan, Gyan; Basnet, Hem C.

doi:10.1080/00036846.2020.1776834

Cited by 40 publications

(11 citation statements)

References 45 publications

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“…The positive signs in Table 8 for the share of investments in GDP variable in most states (except Austria and Luxembourg) show that increased investments have an important contribution to the economic growth of each country, in accordance with the results found by [2,37,39], while decreasing investments would lead to a decrease of growth rate. The results in Tables 9 and 10 show differences during the two intermediate periods.…”

supporting

confidence: 83%

“…Several studies show that remittance flows to developing countries were more stable than other financial flows, even when the world economy was affected by the global financial crisis of 2009 [35,36]. The analysis of the effect of remittances on financial development and implicitly on economic growth for developing countries with a significant flow of remittances shows that there are strong, significant, and positive links between remittances, investments, and economic growth [2,[37][38][39][40].…”

Section: Introductionmentioning

confidence: 99%

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Impact of Employed Labor Force, Investment, and Remittances on Economic Growth in EU Countries

et al. 2020

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This paper analyzes the evolution and influence of gross domestic product per capita, labor force participation rate, gross fixed capital formation, and personal remittances on economic growth for European Union (EU) countries, using data from the World Bank (1996–2019) and from Eurostat (the first two quarters 2019–2020). The study has three components: statistical analysis, analysis of the evolution for each country and EU, and estimation of the impact on economic growth rate by using a linear multifactorial regression model for 1996–2019, 1996–2008, and 2009–2019. The model was validated by econometric techniques. The long-term causal relationship between exogenous and endogenous variables was validated by the Granger test. The results of the study show a differentiated evolution of the indicators, and that all indicators are severely affected by the 2008 financial crisis and the debut of the COVID-19 crisis in early 2020. The model used shows the significant positive influence of labor and investment, and the minor effect of remittances on economic growth. In the context of the COVID-19 epidemic, the results of the study could be arguments to be considered for the redesign of economic policies at European Union level.

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confidence: 83%

Section: Introductionmentioning

confidence: 99%

Impact of Employed Labor Force, Investment, and Remittances on Economic Growth in EU Countries

et al. 2020

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“…A strong positive relationship between domestic investment and domestic savings and remittances has been observed there. A 1% point increase in remittance inflows promotes financial development by more than 1% point in Sub-Saharan countries (Donou-Adonsou et al, 2020). In Ghana, remittances act as a substitute for the formal banking system in sub-Saharan African countries (Opperman and Adjasi, 2019).…”

Section: Literature Reviewmentioning

confidence: 99%

Remittances and households’ savings behaviour in Bangladesh

Salahuddin

Masud

Teng

2021

SBR

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Purpose The purpose of this study is to examine the impact of remittance inflow on households’ savings behaviour in Bangladesh. Remittances are considered as the countercyclical flow of income for its recipient economies. It surges the liquidity of the households receiving remittances, allows them to endure local economic shocks and facilitates them to practice productive activities. Remittances often form a big pool of resources for investment which complement the national savings and support the country’s growth through higher rates of capital accumulation. Therefore, if a significant portion of the remittance is used for savings it can lead to prominent economic growth in the long term. Design/methodology/approach Existing literature indicates remittance-receiving households have a greater propensity to use remittance income to meet basic consumption. However, based on the survey conducted by the Bangladesh Bureau of Statistics on remittances and household savings (SIR, 2016) and using the ordinary least square regression analysis method, to identify the connection between remittances and household’s saving (SIR, 2016) and using the ordinary least square regression analysis method, to identify the connection between remittances and household’s savings behaviour in Bangladesh. Findings The findings of this study represent remittances encourage households to pursue different kinds of savings in Bangladesh. Savings are made in the form of opening savings accounts, deposit pension scheme/fixed deposits/Bonds, insurance policies, also savings through non-governmental organizations, cooperative societies and savings at home. Other than remittances the demographic characteristics of the household head also influence the savings choices. Originality/value To enable the implementation of appropriate policies to boost savings, analysis from both perspectives; the household and the national level, requires strong vigilance and surveillance.

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“…This study finds that workers' remittances foster FD in sample countries. Donou-Adonsou et al (2020) investigate the relationship between remittances and FD in the top remittance recipient countries in sub-Saharan Africa by using data for the 1980-2016 period. This study utilizes a panel cointegration approach to attain the objective and finds that workers' remittances have a mutual relationship with FD in sample countries.…”

Section: Empirical Literaturementioning

confidence: 99%

Empirical relationship between workers' remittances and financial development (an ARDL cointegration approach for Sri Lanka)

Aslam¹,

Sivarajasingham

2020

IJSE

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PurposeThe purpose of this study aims to investigate the nature of the relationship between workers' remittances and financial development (FD) in Sri Lanka for the period from 1975 to 2017.Design/methodology/approachThis study used both the exploratory data analysis and inferential data analysis (IDA) techniques to test the objective of this study. The IDA technique consisted of the augmented Dickey–Fuller (ADF) and Phillips–Perron unit root tests, the autoregressive distributed lag (ARDL) bounds cointegration technique, the Granger causality test and impulse response function analysis.FindingsThe unit root test results show that the variables are in mixed order. The empirical results of cointegration confirm that workers' remittances have a beneficial long-run relationship with FD in Sri Lanka. The Granger causality test result indicates that there is a bidirectional relationship between workers' remittances and FD. The impulse response analysis indicates that a positive shock to workers' remittance has an immediate significant positive impact on the FD of up to 10 years.Practical implicationsThe analytical techniques used in this study explain how workers' remittances induce FD in Sri Lanka.Originality/valueThis study fills an important gap in the academic literature by using newly developed ARDL bounds cointegration techniques in Sri Lanka, by using impulse response function analysis, and by studying the dynamic relationship between workers' remittances and FD using time series data.

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Remittance inflows and financial development: evidence from the top recipient countries in Sub-Saharan Africa

Cited by 40 publications

References 45 publications

Impact of Employed Labor Force, Investment, and Remittances on Economic Growth in EU Countries

Impact of Employed Labor Force, Investment, and Remittances on Economic Growth in EU Countries

Remittances and households’ savings behaviour in Bangladesh

Empirical relationship between workers' remittances and financial development (an ARDL cointegration approach for Sri Lanka)

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