Foreign Remittances, Private Sector Investment and Banking Sector Development

Peter Nderitu Githaiga (nderitugithaiga@mu.ac.ke)
Additional contact information
Peter Nderitu Githaiga: Moi University

Journal of Economics and Financial Analysis, 2019, vol. 3, issue 2, 85-112

Abstract: In the last three decades, foreign remittances flowing to Sub-Saharan Africa have grown more rapidly than the average for developing countries forming a significant component of external capital flows. Simultaneously, there has been an increase in the number of studies investigating the impact of these transfers on consumption and the general welfare of the receiving household. However, very few studies have examined the impact of foreign remittances on private sector investment in Sub-Saharan Africa, which is considered as having an inefficient banking sector. From this background, this study aims to investigate the impact foreign remittances on private sector investment and the moderating role of banking sector development. The study uses a sample of 15 Sub-Saharan African countries with data for the years 1986-2017. The findings of this study indicate that foreign remittances and banking sector development has a positive and statistically significant impact on private investment Sub-Saharan Africa. Moreover, the banking sector development has a moderating effect. These results suggest that foreign remittances are important sources of capital for private investment and it can efficiently fill the financing gaps of inefficient financial markets.

Keywords: Foreign Remittance; Private Sector Investment; Banking Sector Development. (search for similar items in EconPapers)
JEL-codes: F24 F41 F63 F68 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ojs.tripaledu.com/index.php/jefa/article/download/50/58 (application/pdf)
https://ojs.tripaledu.com/index.php/jefa/article/view/50/61 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:trp:01jefa:jefa0033

DOI: 10.1991/jefa.v3i2.a29

Access Statistics for this article

Journal of Economics and Financial Analysis is currently edited by David Simon Hall

More articles in Journal of Economics and Financial Analysis from Tripal Publishing House
Bibliographic data for series maintained by David Simon Hall (info@tripaledu.com).