Harnessing remittances through formal channels for development in sub-Saharan Africa
Year: 2026
Type: article
Abstract: This paper investigates how sub-Saharan African (SSA) countries could harness remittances through formal channels for development using annual data for 35 countries from 1980 to 2008. We control for country heterogeneity, endogeneity and cross-sectional dependence of the error term using the least square dummy variable (LSDV) estimator with Driscoll and Kraay (1998) corrected standard errors, the Kiviet (1995) bias-corrected LSDV estimator and feasible generalized least squares (FGLS) by Parks (1967) and Kmenta (1986). We find that financial deepening in the home country is critical to the use of formal channels and the ability of sub-Saharan African countries to harness remittances for development. Besides remitting home for altruistic reasons, sub-Saharan African migrants would also respond to investment opportunities in their home countries, contingent on a stable exchange rate. Sub-Saharan African migrants also remit more money home when their incomes increase in the host country.
DOI: 10.14749/32386839
Author: Human Sciences Research Council
Language: English
Topic: Migration and Labor Dynamics
Subfield: Sociology and Political Science
Field: Social Sciences
Domain: Social Sciences
Open Access status: green
Funder: Human Sciences Research Council
OpenAlex ID: W7162194295
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