Citation:

Ogbaro, Eyitayo Oyewunmi, Sanni, Oluwatomiwo, Adeoye, Julius Olaniyi, Akintaro, Abel A., Eseyin, Oluwasegun S. "Accounting for the Role of Financial Development in the Nexus between Remittances and Economic Growth in Nigeria" International Research Journal of Economics and Management Studies, Vol. 2, No. 3, pp. 154-166, 2023.

Abstract:

Remittances and financial development, according to academics, have an impact on economic growth by making money available to an economy's deficit side. As a result, this study calculates the minimal financial development level needed for remittances to encourage the expansion of the Nigerian economy. In addition, this study looks at the direct impact of remittances as well as the interaction between remittances and financial development on the growth of Nigeria's economy. The New Structural Economics theory has been modified to serve as the foundation for empirical analysis. In order to conduct an empirical study, annual secondary time series data are used for the years 1981 through 2021. World Development Indicators are the source of information on economic growth as assessed by GDP per capita, remittances, financial development, and physical capital. The Statistical Bulletin of the Central Bank of Nigeria is the source of human data. The study employs the Fully Modified Ordinary Least Squares approach for the econometric analysis. Remittances have a negative and negligible impact on Nigeria's economic growth, according to the study's findings. On the other hand, it is discovered that the relationship between remittances and financial development has a positive and considerable impact on economic growth. The results also show the level of financial development beyond which remittances encourage economic growth in Nigeria. The study concludes that the financial sector's growth is necessary for the impact of remittances on economic growth.

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Keywords:

Economic growth, Financial development, FMOLS, Remittances.