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A Bounds Testing Analysis of Migrants Remittances and Financial Development in Selected Sub-Sahara African Countries

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  • Taiwo Ajilore
  • Sylvanus Ikhide

Abstract

The study investigated the short and long run impact of remittances on financial development, using country-level data on five selected sub-Saharan African countries, which are Cape-Verde, Lesotho, Nigeria, Senegal and Togo. The study utilized the Auto-Regressive Distributed Lag (ARDL) bounds testing approach for testing the existence of co-integration relationships. The study documented the existence of long-run level relationships between remittances and financial development, and documented evidences which show that remittances promote financial development in Cape Verde, Lesotho, Senegal and Togo, but not in Nigeria. The study advocated policies that encourage and facilitate the uninterrupted flow of remittances transfers, adequate institutions, regulatory strengthening and sound macroeconomic policies in the selected countries.

Suggested Citation

  • Taiwo Ajilore & Sylvanus Ikhide, 2012. "A Bounds Testing Analysis of Migrants Remittances and Financial Development in Selected Sub-Sahara African Countries," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 4(2), pages 079-096, December.
    • Handle: RePEc:rfb:journl:v:04:y:2012:i:2:p:079-096
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    Cited by:

    1. Inoue, Takeshi, 2018. "Financial development, remittances, and poverty reduction: Empirical evidence from a macroeconomic viewpoint," Journal of Economics and Business, Elsevier, vol. 96(C), pages 59-68.
    2. Ma, Yechi & Chen, Zhiguo & Shinwari, Riazullah & Khan, Zeeshan, 2021. "Financialization, globalization, and Dutch disease: Is Dutch disease exist for resources rich countries?," Resources Policy, Elsevier, vol. 72(C).
    3. Opperman, Pieter & Adjasi, Charles Komla Delali, 2019. "Remittance volatility and financial sector development in sub-Saharan African countries," Journal of Policy Modeling, Elsevier, vol. 41(2), pages 336-351.
    4. repec:kqi:journl:2017-1-6 is not listed on IDEAS
    5. Dambar Uprety, 2017. "The Impact of Remittances on Economic Growth in Nepal," Journal of Development Innovations, KarmaQuest International, vol. 1(1), pages 114-134, February.

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