Financial inclusion and migrant remittances in Sub-Saharan Africa: a panel VAR approach
International Journal of Social Economics
ISSN: 0306-8293
Article publication date: 10 June 2020
Issue publication date: 15 July 2020
Abstract
Purpose
This study examines the causal and dynamic link between financial inclusion and migrant remittances in sub-Saharan Africa.
Design/methodology/approach
The study employed a panel vector autoregressive (VAR) framework to examine the dynamic relationship between financial inclusion and migrant remittances in sub-Saharan Africa.
Findings
The findings indicate that there is a reverse causality between financial inclusion and migrant remittances in sub-Saharan Africa.
Practical implications
The practical implications of these findings are that central governments and economic policymakers in sub-Saharan African countries should formulate and implement policies aimed at fostering financial inclusion if they are to attract more migrant remittances to promote economic growth and financial sector development. This suggests that these two variables are complementary and not contradictory. The results also suggest that central banks and other financial institutions can leverage the positive effect of financial inclusion of financial sector development to enhance the development of the financial sector instead of pursuing financial sector development as a policy objective. This means policies aimed at promoting financial inclusion will not impede or sacrifice migrant remittances, economic growth and financial sector development.
Originality/value
This paper is the first to construct a financial inclusion index to examine the link between financial inclusion and migrant remittances from the sub-Saharan Africa perspective
Peer review
The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-10-2019-0612/
Keywords
Acknowledgements
The authors are very grateful to the research seminar organizers of the GIMPA Business School. The authors are thankful for the comments from participants at these seminars. The authors also thank the Editor and Reviewers of International Journal of Social Economics for their insightful comments that made this paper better.Funding: The author(s) received no financial support for the research, authorship and/or publication of this article.
Citation
Anarfo, E.B., Amewu, G. and Dzeha, G.C. (2020), "Financial inclusion and migrant remittances in Sub-Saharan Africa: a panel VAR approach", International Journal of Social Economics, Vol. 47 No. 7, pp. 809-829. https://doi.org/10.1108/IJSE-10-2019-0612
Publisher
:Emerald Publishing Limited
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