Financial Openness and Remittances: Evidence from Sub-Saharan Africa
Date
2022
Authors
Effiong, Ekpeno L.
Asuquo, Emmanuel E.
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research Consortium
Abstract
Does financial openness matter for remittances? Are the effects of financial openness
on remittance dependent on the levels of financial and institutional development?
This paper investigates these questions using panel data for 31 sub-Saharan African
countries over from 1990 to 2015, and using a dynamic panel system generalized
method of moments (GMM) estimation technique. The results show that financial
openness, albeit having a declining effect, does not significantly influence the inflow
of remittances into the region. In contrast, when conditioned on the levels of financial
development and institutional quality, financial openness tends to significantly
increase remittances. However, this effect declines with significant improvement in
institutional quality and a well-developed financial sector. Thus, financial openness
substitutes financial and institutional development in fostering remittances in the
region.
Description
Keywords
Remittances; Financial Openness; Financial Development; Institutional Quality; Sub-Saharan Africa.