Remittance volatility and financial sector development in sub-Saharan African countries
Pieter Opperman and
Charles Komla Delali Adjasi
Journal of Policy Modeling, 2019, vol. 41, issue 2, 336-351
In this study we examine the relationship between remittances, remittance volatility and financial sector development in sub-Saharan Africa using a two-step system GMM estimator over the period 2002–2014. Separately focussing on banking sector- and stock market development, our study distinguishes between the effect of remittances and remittance volatility on financial sector depth and financial sector efficiency. The results indicate remittances act as a substitute for the formal banking system in sub-Saharan African countries. We further provide evidence that remittance volatility is detrimental to both banking sector depth and efficiency. No evidence is found that remittance volatility is related to stock market development. A policy implication from our study is that sub-Saharan African countries should have measures in place to monitor the predictability of remittances while the cost of remittance transfer needs to be investigated.
Keywords: Remittance volatility; Financial development; Panel data (search for similar items in EconPapers)
JEL-codes: F24 O16 C23 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:41:y:2019:i:2:p:336-351
Access Statistics for this article
Journal of Policy Modeling is currently edited by A. M. Costa
More articles in Journal of Policy Modeling from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().