scholarly journals Remittances, institutions and human development in Sub-Saharan Africa

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Umar Mohammed
Keyword(s):  
Human Development ◽  
Measurement Errors ◽  
Generalized Method Of Moments ◽  
Sub Saharan Africa ◽  
Future Research ◽  
Content Type ◽  
Lagged Dependent Variable ◽  
Sub Saharan ◽  
The Impact ◽  
The Relationship

PurposeThe purpose of this paper is to examine the relationship between remittances, institutions and human development (HD) in Sub-Saharan African (SSA) countries using data from 2004 to 2018. The study attempts to answer two critical questions: Do the increasing remittances inflow to the region have any effect on human capital development? and does the effect of remittances on human development vary depending on the level of institutional quality?Design/methodology/approachThe analysis uses a dynamic model; system Generalized Method of Moments (Sys-GMM) as this approach controls for the endogeneity of the lagged dependent variable; thus, when there is a correlation between the explanatory variable and the error term, which is normally associated with remittances, it also controls for omitted variable bias, unobserved panel heterogeneity and measurement errors in the estimation.FindingsThe findings indicate a positive and significant impact of remittances on HD in SSA. The results further reveal a substitutional relationship between institutions and remittances in stimulating HD. The estimations mean that remittances promote HD in countries with a weak institutional environment. The findings also establish that the marginal significance of remittances as a source of capital for HD falls in countries with well-developed institutions.Originality/valueMost empirical research on the impact of remittances on HD does not tackle the problem of endogeneity associated with remittances. This study, however, provides empirical evidence by using Sys-GMM that solves the problem. The current study also is the first work to examine the relationship between remittances, institutions and HD in SSA and provides a new guide for future research on the remittance and HD nexus.

Financial freedom, market power and bank margins in sub-Saharan Africa

2019 ◽  
Vol 28 (2) ◽  
pp. 283-299 ◽  
Author(s):  
Emmanuel Sarpong-Kumankoma ◽  
Joshua Abor ◽  
Anthony Quame Q. Aboagye ◽  
Mohammed Amidu
Keyword(s):  
Market Power ◽  
Generalized Method Of Moments ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Content Type ◽  
Interest Margins ◽  
Sub Saharan ◽  
The Impact ◽  
The Relationship ◽  
Practical Implications

Purpose This paper examines the effect of financial (banking) freedom and market power on bank net interest margins (NIM). Design/methodology/approach The study uses data from 11 sub-Saharan African countries over the period, 2006-2012, and the system generalized method of moments to assess how financial freedom affects the relationship between market power and bank NIM. Findings The authors find that both financial freedom and market power have positive relationships with bank NIM. However, there is some indication that the impact of market power on bank margins is sensitive to the level of financial freedom prevailing in an economy. It appears that as competition intensifies, margins of banks in freer countries are likely to reduce faster than those in areas with more restrictions. Practical implications Competition policies could be guided by the insight on how financial freedom moderates the effect of market power on bank margins. Originality/value This study provides new empirical evidence on how the level of financial freedom affects bank margins and the market power-bank margins relationship.

Innovation, institutions and economic growth in sub-Saharan Africa – an IV estimation of a panel threshold model

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Joseph Ato Forson ◽  
Rosemary Afrakomah Opoku ◽  
Michael Owusu Appiah ◽  
Evans Kyeremeh ◽  
Ibrahim Anyass Ahmed ◽  
...  
Keyword(s):  
Economic Growth ◽  
Developing Economies ◽  
Innovation Policy ◽  
Threshold Model ◽  
Sub Saharan Africa ◽  
Content Type ◽  
Panel Regressions ◽  
Sub Saharan ◽  
The Impact ◽  
The Relationship

PurposeThe significant impact of innovation in stimulating economic growth cannot be overemphasized, more importantly from policy perspective. For this reason, the relationship between innovation and economic growth in developing economies such as the ones in Africa has remained topical. Yet, innovation as a concept is multi-dimensional and cannot be measured by just one single variable. With hindsight of the traditional measures of innovation in literature, we augment it with the number of scientific journals published in the region to enrich this discourse.Design/methodology/approachWe focus on an approach that explores innovation policy qualitatively from various policy documents of selected countries in the region from three policy perspectives (i.e. institutional framework, financing and diffusion and interaction). We further investigate whether innovation as perceived differently is important for economic growth in 25 economies in sub-Saharan Africa over the period 1990–2016. Instrumental variable estimation of a threshold regression is used to capture the contributions of innovation as a multi-dimensional concept on economic growth, while dealing with endogeneity between the regressors and error term.FindingsThe results from both traditional panel regressions and IV panel threshold regressions show a positive relationship between innovation and economic growth, although the impact seems negligible. Institutional quality dampens innovation among low-regime economies, and the relation is persistent regardless of when the focus is on aggregate or decomposed institutional factors. The impact of innovation on economic growth in most regressions is robust to different dimensions of innovation. Yet, the coefficients of the innovation variables in the two regimes are quite dissimilar. While most countries in the region have offered financial support in the form of budgetary allocations to strengthen institutions, barriers to the design and implementation of innovation policies may be responsible for the sluggish contribution of innovation to the growth pattern of the region.Originality/valueSegregating economies of Africa into two distinct regimes based on a threshold of investment in education as a share of GDP in order to understand the relationship between innovation and economic growth is quite novel. This lends credence to the fact that innovation as a multifaceted concept does not take place by chance – it is carefully planned. We have enriched the discourse of innovation and thus helped in deepening understanding on this contentious subject.

scholarly journals Do remittances promote human development? Empirical evidence from developing countries

2019 ◽  
Vol 46 (10) ◽  
pp. 1173-1185
Author(s):  
Chong Siew Huay ◽  
Jonathan Winterton ◽  
Yasmin Bani ◽  
Bolaji Tunde Matemilola
Keyword(s):  
Developing Countries ◽  
Human Development ◽  
Empirical Evidence ◽  
Measurement Errors ◽  
Future Research ◽  
Critical Question ◽  
Dynamic Panel ◽  
Content Type ◽  
Panel Estimates ◽  
The Impact

Purpose The purpose of this paper is to analyse the impact of remittances on human development in developing countries using panel data from 1980 to 2014 and to address the critical question of whether the increasing trend of remittances has any impact on human development in a broad range of developing countries. Design/methodology/approach Usual panel estimates, such as pooled OLS, fixed or random effects model, possess specification issues such as endogeneity, heterogeneity and measurement errors. In this paper, we, therefore, apply dynamic panel estimates – System generalised method of moment (Sys-GMM) developed by Arellano and Bond (1991) and Arellano and Bover (1995). This estimator is able to control for the endogeneity of all the explanatory variables, account for unobserved country-specific effects that cannot be done using country dummies due to the dynamic structure of the model (Azman-Saini et al., 2010). Findings The effect of remittances is statistically significant with positive coefficients in developing countries. The significant coefficient of remittances means that, holding other variables constant, a rise in remittance inflows is associated with improvements in human development. A 10 per cent increase in remittances will lead to an increase of approximately 0.016 per cent in human development. These findings are consistent with Üstubuci and Irdam (2012) and Adenutsi (2010), who found evidence that remittances are positively correlated with human development. Practical implications The paper considers implications for policymakers to justify the need for more effective approaches. Policymakers need to consider indicators of human development and to devise public policies that promote income, health and education, to enhance human development. Originality/value The question of whether remittances affect human development has rarely been subject to systematic empirical study. Extant research does not resolve the endogeneity problem, whereas the present study provides empirical evidence by utilising dynamic panel estimators such as Sys-GMM to tackle the specification issues of endogeneity, measurement errors and heterogeneity. The present study provides a benchmark for future research on the effect of remittances on human development.

Microfinance board and default risk in sub-Saharan Africa

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Haileslasie Tadele
Keyword(s):  
Default Risk ◽  
Generalized Method Of Moments ◽  
Geographical Area ◽  
Sub Saharan Africa ◽  
Future Research ◽  
Board Structure ◽  
Microfinance Institutions ◽  
Content Type ◽  
Sub Saharan ◽  
Female Director

PurposeThis paper examines whether board structure affects microfinance institutions' (MFIs) default risk in sub-Saharan Africa (SSA).Design/methodology/approachThe paper uses a pooled OLS and system generalized method of moments (GMM) model on unbalanced panel data from 214 MFIs in 26 SSA countries over 2005–2016 period. Default risk is measured using non-performing loans (loans overdue 30 and 90 days) and loans written-off ratios. Board size, proportion of independent and female directors are used as proxies for board structure.FindingsThe empirical results indicate that unregulated MFIs with larger and more independent boards tend to have a lower default risk. In addition, unregulated MFIs with a female director tend to lower default risk.Research limitations/implicationsThis research mainly focusses on SSA. Future research may consider a broader geographical area.Practical implicationsPoor loan portfolio quality is one of the major problems of MFIs operating in SSA. The findings of this study will contribute in emphasizing the role of an effective board structure in lowering MFI default risk.Originality/valueThis study is unique in terms of investigating whether board structure impacts default risk based on MFI regulation.

scholarly journals MIGRATION-TRADE NEXUS IN SUB-SAHARAN AFRICA: EVIDENCE FROM A DYNAMIC PANEL STUDY

2020 ◽  
Vol 6 (4) ◽  
pp. 302-306
Author(s):  
SUNDAY ELIJAH ◽  
Hanny Zurina Hamzah ◽  
Law Siong Hook ◽  
Shivee Ranjanee Kaliappan
Keyword(s):  
Panel Study ◽  
Generalized Method Of Moments ◽  
Sub Saharan Africa ◽  
Large Numbers ◽  
Sub Saharan ◽  
The Impact ◽  
The Relationship ◽  
Watch List ◽  
Ssa Countries ◽  
Positive Population

This study examines the impact of migration on trade in SSA region. We used the system generalized method of moments (GMM) estimator with data for 45 sub-Saharan Africa (SSA) countries from the period 1981-2015 to examine the relationship between migration and trade. The econometric results of our model for migration is negative and significant, this vindicated and validated the Heckscher-Ohlin theory. Furthermore, the econometric results of this study for GDP showed it is significant and positive, population is negative and significant, and lastly exchange rate shows it is significant and positive. In general, the findings of this study supported the theories and previous studies. The robustness test showed similar results with the main results of this study. Our model has passed all the diagnostic tests that were conducted, that is, the Sargan, AR1 and AR2 tests, they were all consistent and are in line with the theory. Hence, we can conclude that our results from these estimations are valid and reliable. This study recommended that migration in SSA should be on control and watch list where this will aid in reducing migration in large numbers and some of the migration issues which trade is one of them.

Public management systems, accounting education, and compliance with international public sector accounting standards in sub-Saharan Africa

2019 ◽  
Vol 33 (2/3) ◽  
pp. 141-164 ◽  
Author(s):  
Yosra Mnif Sellami ◽  
Yosra Gafsi
Keyword(s):  
Financial Reporting ◽  
Public Management ◽  
Accounting Education ◽  
Sub Saharan Africa ◽  
Management Systems ◽  
Future Research ◽  
Content Type ◽  
Study Results ◽  
Sub Saharan ◽  
The Impact

Purpose The purpose of this paper is to examine the transparency and completeness of government financial reporting in sub-Saharan African countries by assessing the extent of compliance with IPSAS disclosures and to investigate the impact of the strength of public management systems (SPMS) and accounting education on this level. Design/methodology/approach This research develops a self-constructed disclosure index from content analysis and applies panel regressions for a sample of 60 sub-Saharan African government entities during the period 2014–2017. Findings The study results indicate that IPSAS disclosure levels significantly vary across sub-Saharan African governments. They reveal a positive effect of the SPMS and accounting education on the extent of compliance with IPSAS in this region. Practical implications The study findings are of interest to practitioners, researchers, government policy makers, supervisory authorities and professional bodies. By focusing on the effect of the SPMS and accounting education on IPSAS disclosure level, this paper leaves room for future research to investigate other relevant factors associated with the compliance with these standards whether in sub-Saharan Africa or in other parts of the world. Originality/value This paper gives new insights into the assessment of the quality and transparency of government financial reporting in sub-Saharan Africa by examining the extent of compliance with IPSAS in this region. It is the first to investigate the impact of the SPMS and accounting education on this level.

The relationship between corporate governance, corruption and forward-looking information disclosure: a comparative study

2017 ◽  
Vol 17 (2) ◽  
pp. 284-304 ◽  
Author(s):  
Ben Kwame Agyei-Mensah
Keyword(s):  
Corporate Governance ◽  
Descriptive Analysis ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Content Type ◽  
Listed Firms ◽  
Sub Saharan ◽  
The Impact ◽  
The Relationship ◽  
Forward Looking

Purpose This paper aims to examine the relationship between corporate governance, corruption and disclosure of forward-looking information in listed firms in two African countries, Botswana and Ghana. Design/methodology/approach The study uses 174 firm-year observations between the period of 2011-2013 for listed firms in the two countries. Each annual report was individually examined and coded to obtain the disclosure of forward-looking information index. Descriptive analysis was performed to provide the background statistics of the variables examined. This was followed by regression analysis which forms the main data analysis. Findings The findings show that firms in the least corrupt country, Botswana, disclose more forward-looking information than firms in Ghana, one of the most corrupt countries in sub-Saharan Africa. This confirms the relationship between the transparency level of a country and the transparency level of the listed firms in that country. Originality/value This is one of the few studies in sub-Saharan Africa that considered the impact of corporate governance factors on transparency and disclosure of forward-looking information. This study contributes to the literature on the relationship between corporate governance and disclosure by showing that disclosure of forward-looking information in Ghana is associated with the proportion of independent board members. The disclosure of forward-looking information in Botswana on the other hand is influenced by board ownership concentration. The findings of this study will help market regulators in Ghana, Botswana and sub-Saharan Africa, Security and Exchange Commission (SEC) and the Sub-Sahara African Exchanges in evaluating the adequacy of the current disclosure regulations in their countries.

Impact of migration on economic growth and human development

2017 ◽  
Vol 44 (5) ◽  
pp. 683-695 ◽  
Author(s):  
Olusegun Ayodele Akanbi
Keyword(s):  
Economic Growth ◽  
Human Development ◽  
Sub Saharan Africa ◽  
Quality Data ◽  
Domestic Investment ◽  
Social Expenditure ◽  
Content Type ◽  
Sub Saharan ◽  
The Impact ◽  
Ssa Countries

Purpose The purpose of this paper is to examine the impact of migration on economic growth and human development in selected Sub-Saharan African (SSA) countries. Design/methodology/approach The estimations were carried out in a panel of 19 selected SSA countries over the period 1990-2013, using the two-stage least squares estimation techniques. Two measures of migration, namely stock of international migrants and the ratio of personal remittances received to personal remittances paid were used in the study to carry out this investigation. Findings The results conform to the findings of existing literature, namely that social expenditure, domestic investment, financial inclusion, income inequality, income and human poverty are significant determinants of either human development or per capita GDP in Sub-Saharan Africa. The distinctive feature of the study is the significant but negative role played by migration in explaining human development and economic growth in the region. The results from the panel estimations reveal that an increase in the measures of migration deteriorates the level of human development and growth of the region. Research limitations/implications The major limitation of this study is the unavailability of quality data on migration flows. Therefore, it would be imperative to reinvestigate the specifications adopted in this study in follow-up studies. Practical implications The study includes implications for policy makers, especially in SSA countries, that the pattern and flow of migration does not circulate within the region and has tended to drain out human capital to other regions of the world. In the same event, the stock of migrants residing in the region may be low-skilled migrants that do not contribute directly to the level of human development. Originality/value To assess the impact of migration on economic growth and development such as the SSA region, it is imperative to follow the growth-based, capacity-based and asset-based approaches to development. This study has made this distinction.

Poverty prevalence and negative spillovers in Sub-Saharan Africa: a focus on extreme and multidimensional poverty in the region

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Olumide Olaoye ◽  
Cleopatra Oluseye Ibukun ◽  
Mustafa Razzak ◽  
Naftaly Mose
Keyword(s):  
Generalized Method Of Moments ◽  
Spillover Effect ◽  
Multidimensional Poverty ◽  
Sub Saharan Africa ◽  
Cross Sectional ◽  
Spatial Error ◽  
Content Type ◽  
The Sustainable Development ◽  
Sub Saharan ◽  
High Level

PurposeThe paper analyses the prevalence of extreme and multidimensional poverty in line with the sustainable development agenda. In addition, the paper examines the drivers of extreme poverty while accounting for the potential spillover effect of poverty in the region.Design/methodology/approachThe study adopts the pooled OLS with Discroll-Kraay robust standard errors to control for cross-sectional dependence. In addition, given the strong potential for endogeneity of poverty index, the authors also employ the generalized method of moments (GMM), which accounts for simultaneity and endogeneity problems, and the spatial error and lag models to control for all forms of spatial and temporal dependence since the factors that affect poverty disperse across borders.FindingsThe study finds that in addition to the traditional drivers of poverty (unemployment, low per capita GDP growth and public debt), poverty in Sub-Saharan Africa is a symptom of a deeper structural problem (lack of access to water and sanitation, high level of corruption and low level of financial development, and frequent economic busts). Likewise, the results from the spatial econometric specification show, consistently across all the specifications, that there is a substantial spillover effect of poverty across the region.Originality/valueThe main novelty of the paper is that the authors investigate the “economic shrinkage hypothesis,” and examined the potential negative spillover effect of poverty in the region.

Economic freedom, competition and bank stability in Sub-Saharan Africa

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Emmanuel Sarpong-Kumankoma ◽  
Joshua Yindenaba Abor ◽  
Anthony Q. Q. Aboagye ◽  
Mohammed Amidu
Keyword(s):  
Economic Freedom ◽  
Banking Sector ◽  
Generalized Method Of Moments ◽  
Sub Saharan Africa ◽  
Bank Stability ◽  
Content Type ◽  
Show Evidence ◽  
Negative Effect ◽  
Sub Saharan ◽  
The Stability

PurposeThis study aims to analyze the potential implications of economic freedom and competition for bank stability.Design/methodology/approachUsing system generalized method of moments and data from 139 banks across 11 Sub-Saharan African (SSA) countries during the period 2006–2012, this study considers whether the degree of economic freedom affects the relationship between competition and bank stability.FindingsThe results show evidence of the competition-fragility hypothesis in SSA banking, but suggests that beyond a setting threshold, increases in market power may also be damaging to bank stability. Financial freedom has a negative effect on bank stability, suggesting that banks operating in environments with greater financial freedom generally tend to be less stable or more risky. The authors also find evidence of a conditional effect of economic freedom on the competition–stability relationship, implying that bank failure is more likely to occur in countries with greater economic freedom, but with low competition in the banking sector.Practical implicationsThe results suggests to policy makers that a moderate level of competition and economic freedom may be the appropriate policy to ensure the stability of banks.Originality/valueThe study provides insight on the competition–bank stability relationship, by providing new empirical evidence on the effect of economic freedom, which has not been previously considered.

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