DOES REMITTANCE INFLOW PROMOTE HUMAN DEVELOPMENT IN SUB-SAHARAN AFRICA? AN EMPIRICAL INSIGHT

This paper examines the relationship between human development, remittances and other macroeconomic variables like life expectancy, human capital, FDI, inflation, economic growth and financial development by considering 31 Sub-Saharan African (SSA) countries during the period of 1990–2018. Kao and Fisher residual cointegration tests are applied to check the cointegration among the variables in the long-run. We apply fully modified OLS (FMOLS) and DOLS to show the long-run elasticity of explanatory variables on dependent variable. The result indicates that remittances have a positive and statistically significant effects on human development in SSA region. Similarly, government expenditure, human capital, inflation and economic growth have positive effects on human development in the region. Dumitrescu–Hurlin panel granger causality tests were observed such that there is a unidirectional causality between remittance and human development in SSA countries. However, human development and inflation rate show bi-directional relationship with each other. This paper suggests that public policies can be conceived to promote health, education and income, thereby encouraging and enhancing human development. Policymakers should also rely on other macroeconomic factors, such as government spending and financial development, to stimulate human development in SSA region.

The Nexus between Financial Development and Economic Growth: Panel Data Evidence from Developing Countries

Journal of Risk and Financial Management ◽

10.3390/jrfm14100489 ◽

2021 ◽

Vol 14 (10) ◽

pp. 489

Author(s):

E. M. Ekanayake ◽

Ranjini Thaver

Keyword(s):

Economic Growth ◽

Developing Countries ◽

Panel Data ◽

Least Squares ◽

Financial Development ◽

Panel Cointegration ◽

Sub Saharan Africa ◽

Explanatory Variables ◽

Cointegration Tests ◽

The objective of this study is to investigate the nexus between financial development (FD) in economic growth (GROWTH) in developing countries. The study uses panel data from 138 developing countries during the period 1980–2018. The relationship between financial development and economic growth is investigated using four explanatory variables that are commonly used to measure the level of financial development and several other control variables, including a dummy variable representing the financial and banking crises. The sample of 138 developing countries is also classified into six geographic regions. We have carried out panel unit-root tests and panel cointegration tests before estimating the specified models using both Panel Least Squares (Panel LS) and Panel Fully Modified Least Squares (FMOLS) methods. In addition, panel Granger causality tests have been conducted to identify the direction of causality between FD and GROWTH for each of the regions. The results of the study provide evidence of a direct relationship between FD and GROWTH in developing countries. Furthermore, there is evidence of bi-directional causality running from FD to GROWTH and from GROWTH to FD in samples of Europe and Central Asia, South Asia, and all countries, but not in East Asia and Pacific, Latin America and the Caribbean, Middle East and North Africa, and Sub-Saharan Africa.

Interactive effects of human capital in finance–economic growth nexus in Sub-Saharan Africa

Journal of Economic Studies ◽

10.1108/jes-07-2017-0199 ◽

2018 ◽

Vol 45 (6) ◽

pp. 1192-1210 ◽

Cited By ~ 6

Author(s):

Muazu Ibrahim

Keyword(s):

Economic Growth ◽

Human Capital ◽

Interactive Effect ◽

Financial Sector ◽

Content Type ◽

Long Run ◽

The World ◽

Sub Saharan ◽

Purpose The purpose of this paper is to examine the interactive effect of human capital in financial development–economic growth nexus. Relative to the quantity-based measure of enrolment rates, the main aim was to determine how quality of human capital proxied by pupil–teacher ratio influences the relationship between domestic financial sector development and overall economic growth. Design/methodology/approach Data are obtained from the World Development Indicators of the World Bank for 29 sub-Saharan African (SSA) countries over the period 1980–2014. The analyses were conducted using the system generalised method of moments within the endogenous growth framework while controlling for country-specific and time effects. The author also follows Papke and Wooldridge procedure in examining the long-run estimates of the variables of interest. Findings The key finding is that, while both human capital and financial development unconditionally promotes growth in both the short and long run, results from the interactive terms suggest that, irrespective of the measure of finance, financial sector development largely spurs growth on the back of quality human capital. This finding is also confirmed by the marginal and net effects where the interactive effect of pupil–teacher ratio and indicators of finance are consistently huge relative to the enrolment. Statistically, the results are robust to model specification. Practical implications While it is laudable for SSA countries to increase access to education, it is equally more crucial to increase the supply of teachers at the same time improving on the limited teaching and learning materials. Indeed, there are efforts to develop rather low levels of the financial sector owing to its unconditional growth effects. Beyond the direct benefit of finance, however, higher growth effect of finance is conditioned on the quality level of human capital. The outcome of this study should therefore reignite the recognition of the complementarity role of human capital and finance in economic growth process. Originality/value The study makes significant contributions to existing finance–growth literature in so many ways: first, the auhor extend the literature by empirically examining how different measures of human capital shape the finance–economic growth nexus. Through this the author is able to bring a different perspective in the literature highlighting the role of countries’ human capital stock in mediating the impact of financial deepening on economic growth. Second, the author makes a more systematic attempt to evaluate the relative importance of finance and human capital in growth process while controlling for several ancillary variables.

Financial development and economic growth: literature survey and empirical evidence from sub-Saharan African countries

South African Journal of Economic and Management Sciences ◽

10.4102/sajems.v12i1.258 ◽

2011 ◽

Vol 12 (1) ◽

pp. 11-27 ◽

Cited By ~ 17

Author(s):

Songul Kakilli Acaravci ◽

Ilhan Ozturk ◽

Ali Acaravci

Keyword(s):

Economic Growth ◽

Financial Development ◽

Banking Sector ◽

Sub Saharan Africa ◽

African Countries ◽

Real Gdp ◽

Long Run ◽

Domestic Credit ◽

Real Gdp Per Capita ◽

In this paper we review the literature on the finance-growth nexus and investigate the causality between financial development and economic growth in Sub-Saharan Africa for the period 1975-2005. Using panel co-integration and panel GMM estimation for causality, the results of the panel co-integration analysis provide evidence of no long-run relationship between financial development and economic growth. The empirical findings in the paper show a bi-directional causal relationship between the growth of real GDP per capita and the domestic credit provided by the banking sector for the panels of 24 Sub-Saharan African countries. The findings imply that African countries can accelerate their economic growth by improving their financial systems and vice versa.

Health and Economic Growth Nexus: Evidence from Selected Sub-Saharan African (SSA) Countries

Global Business Review ◽

10.1177/0972150918778966 ◽

2018 ◽

Vol 21 (2) ◽

pp. 328-347 ◽

Cited By ~ 2

Author(s):

Bernard Sarpong ◽

Edward Nketiah-Amponsah ◽

Nkechi S. Owoo

Keyword(s):

Economic Growth ◽

Human Capital ◽

Institutional Quality ◽

Causal Link ◽

Least Square ◽

Percentage Increase ◽

Capita Health Expenditure ◽

Long Run ◽

Sub Saharan ◽

This article examines the effect of health on long-run economic growth in 35 selected sub-Saharan African (SSA) countries using panel data covering the period 1997–2016. Data were analysed using panel co-integration tests, panel Granger causality tests and the dynamic OLS estimator. The results show that health human capital is a significant determinant of long-run economic growth in SSA. In particular, a percentage increase in health human capital proxied by per capita health expenditure increases growth by 0.207 per cent. The prime contribution of this article to the literature lies in the results of the novel interaction between health human capital and institutional quality. More precisely, by using the dynamic panel least square estimation technique, we found that the effect of institutional quality on economic growth is positive and robust only when it is interacted with the required health human capital. It is further revealed that the causal link between economic growth and health is bidirectional.

Critical Analysis of Governance, Economic Freedom, and Human Capital Implications on Sustainable Economic Growth: Evidence from Sub-Saharan Africa

International Journal of Social Science and Economics Invention ◽

10.23958/ijssei/vol07-i08/312 ◽

2021 ◽

Vol 7 (08) ◽

Author(s):

Yusuf Ayotunde Ayodeji

Keyword(s):

Economic Growth ◽

Human Capital ◽

Causal Relationship ◽

Economic Freedom ◽

Sub Saharan Africa ◽

Pooled Mean Group ◽

Long Run ◽

Short Run ◽

Sub Saharan ◽

Sustainable Economic Growth

In the recent time, the attention of scholars have shifted towards deeper understanding of factors that drives the achievement of sustainable economic growth, but yet factors such as governance, economic freedom, and human capital have not been exhaustively investigated, especially within the context of Sub-Saharan Africa (SSA). Thus, this study investigates the implications of governance, economic freedom, and human capital on the sustainability of economic growth in the SSA, usingpanel data that spanned between 1996 and 2018, and employed a Pooled Mean Group (PMG) estimator for the analysis. This study found governance, economic, and human capital to have a positive and significant causal relationship with economic growth in the long-run, while only economic freedom was found to have a negative and significant causal relationship with economic growth in the short-run. In addition, this study found that in case of disequilibrium, the model has a convergent speed of adjustment of about 10.8%. The study implications were discussed in the study.

Impact of migration on economic growth and human development

International Journal of Social Economics ◽

10.1108/ijse-07-2015-0190 ◽

2017 ◽

Vol 44 (5) ◽

pp. 683-695 ◽

Cited By ~ 2

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 ◽

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.

Challenges of Globalization and Prospects for an Inter-civilizational World Order ◽

Human Capital Contribution to the Economic Growth of Sub-Saharan Africa: Does Health Status Matter? Evidence from Dynamic Panel Data

10.1007/978-3-030-44058-9_38 ◽

2020 ◽

pp. 713-724

Author(s):

Abel Kinyondo ◽

Mwoya Byaro

Keyword(s):

Economic Growth ◽

Human Capital ◽

Health Status ◽

Panel Data ◽

Dynamic Panel Data ◽

Sub Saharan Africa ◽

Dynamic Panel ◽

Effects of FDI and Human Capital on Economic Growth in Sub-Saharan Africa

Pakistan Journal of Social Sciences ◽

10.3923/pjssci.2011.32.38 ◽

2011 ◽

Vol 8 (1) ◽

pp. 32-38 ◽

Cited By ~ 6

Author(s):

Rasak Adetunji Adefabi

Keyword(s):

Economic Growth ◽

Human Capital ◽

Sub Saharan Africa ◽

Social, Political, and Environmental Impacts in Sub-Saharan Africa

How China is Reshaping the Global Economy ◽

10.1093/oso/9780198738510.003.0008 ◽

2018 ◽

pp. 183-219

Author(s):

Rhys Jenkins

Keyword(s):

Environmental Impacts ◽

Working Conditions ◽

Sub Saharan Africa ◽

Systematic Research ◽

Political Issues ◽

Positive Effects ◽

The Social ◽

Sub Saharan ◽

Negative Impacts ◽

Some of the most controversial aspects of China’s economic presence in Sub-Saharan Africa (SSA) relate to the social, political, and environmental impacts. Many of the claims that are made are based on anecdotal evidence, and there is a need for more systematic research on these aspects. In terms of social impacts, the chapter discusses employment, wages, working conditions, and labour rights. Political issues addressed include claims that China’s involvement supports authoritarian regimes, encourages corruption, and leads to conflict and political instability. These claims are not generally supported, and SSA countries have benefitted from the increased policy space that Chinese involvement gives them. The environmental effects of both increased exports to China and the activities of Chinese firms in SSA are analyzed. Contrasting case studies illustrate the negative impacts of China on forestry, and the positive effects of Chinese support for wind and solar power.

The nexus between economic institutions and unemployment: evidence from sub-Saharan Africa

International Journal of Development Issues ◽

10.1108/ijdi-03-2020-0048 ◽

2020 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Abdullahi Abdulhakeem Kilishi ◽

Hammed Adesola Adebowale ◽

Sodiq Abiodun Oladipupo

Keyword(s):

Panel Data ◽

Private Investment ◽

Developed Countries ◽

Sub Saharan Africa ◽

Economic Institutions ◽

Male And Female ◽

Content Type ◽

Long Run ◽

Sub Saharan ◽

Purpose This paper aims to investigate the nexus between economic institutions (EI) and unemployment in sub-Saharan African (SSA) countries. Specifically, the paper examines the impact of aggregate EI and ten different components of institutions on total, male and female unemployment in SSA. Design/methodology/approach The paper used unbalanced panel data of 37 SSA countries covering the period between 1995 and 2018. A dynamic heterogenous panel data model is specified for the study. Two alternative estimation techniques of dynamic fixed effect and pool mean group methods were used to estimate the models. The choice of appropriate method is based on Hausman specification test. Findings The findings reveal that aggregate EI and institutions related to the monetary system, trade flows, government spending and fiscal process significantly lead to less unemployment in the long-run. However, there is no evidence of a significant relationship between EI and unemployment in the short-run. These findings are consistent for total, male and female unemployment, respectively. Practical implications To reduce unemployment significantly in the long run, policymakers in SSA need to build more market-friendly institutions that will incentivize private investment, allow free movement of labour and goods, as well as guarantee a stable macroeconomic environment and efficient fiscal system. Originality/value Most of the existing studies focused on the influence of labour market institutions on unemployment ignoring the effects of other forms of institutions. While available studies on the link between institutions and unemployment used either OECD or other developed countries sample, with scanty evidence from Africa. However, the effects of EI could vary across regions. Thus, generalizing the findings from developed countries for SSA countries and other developing countries may be misleading. Hence, this paper contributes to the existing literature by examining the nexus between different types of EI and unemployment using the SSA sample.