Interactive Effect of Migrant Remittances and Financial Market Development on Growth in Sub-Saharan Africa

Abstract

Purpose: The aim of this study is to examine the interactive effect of migrant remittances and financial market development on growth in Sub-Saharan Africa (SSA). Design/Methodology/Approach: The study uses the dynamic heterogeneous panel data approach-the pool mean group (PMG) technique in analyzing data obtained from twenty-seven countries covering the period 2000- 2020. Findings: The study findings reveal that the interactive effect of migrant remittances and financial market development on growth in the region is positive and significant, implying a complementarity relationship. Originality: The value of the study is represented by the measurement of key variables like financial market development (i.e. equity market development and banking sector development). Also, investigating whether the interactive effect of migrant remittances and financial market development on growth in Sub-Saharan Africa (SSA) is complementarity or substitutes is of importance to guide policymakers in the region.