Do remittances receive drive imports? Evidence from the low and high remittances destinations in Africa

Adegoke Adeleke and Damilola Felix Arawomo

International Journal of Business and Emerging Markets, 2023, vol. 15, issue 3, 307-320

Abstract: We analysed the effects of remittances received on import of products in Africa. For robustness, the low remittance receiving countries were compared with the high receiving ones. Based on the presence of endogeneity in the model, we adopted the panel two-stage least square (2SLS) to estimate the import demand function that incorporated the remittances received. While remittances impact positively and significantly on import in high remittance receiving countries, the effect is insignificant in low remittance receiving countries. Exchange rate depreciation significantly reduces import in all the samples. Another interesting result obtained is while external reserves significantly increase imports in low remittance receiving countries, the impact is insignificant in high remittances receiving countries. Consumption expenditure produced positive significant effect on import in the entire sample. Inflation and investment were found to be insignificant on imports.

Keywords: import demand functions; import penetration; remittances received; African countries; Africa. (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijbema:v:15:y:2023:i:3:p:307-320

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