Financial inclusion, remittances and household consumption in sub-Saharan Africa: Evidence from the application of an endogenous threshold dynamic panel model

Abor, J. Y., Amidu, M., & Issahaku, H. (2018). Mobile telephony, financial inclusion and inclusive growth. Journal of African Business, 19(3), 430–453. https://doi.org/10.1080/15228916.2017.1419332 Search in Google Scholar

Acosta, P., Calderon, C., Fajnzylber, P., & Lopez, H. (2008). What is the impact of international remittances on poverty and inequality in Latin America? World Development, 36(1), 89–114. https://doi.org/10.1016/j.worlddev.2007.02.016 Search in Google Scholar

Adams, J. R. H., & Cuecuecha, A. (2013). The impact of remittances on investment and poverty in Ghana. World Development, 50, 24–40. https://doi.org/10.1016/j.worlddev.2013.04.009 Search in Google Scholar

Aggarwal, R., Demirgüç-Kunt, A., & Pería, M. S. M. (2011). Do remittances promote financial development? Journal of Development Economics, 96(2), 255–264. https://doi.org/10.1016/j.jdeveco.2010.10.005 Search in Google Scholar

Ajefu, J. B., & Ogebe, J. O. (2019). Migrant remittances and financial inclusion among households in Nigeria. Oxford Development Studies, 47(3), 319–335. https://doi.org/10.1080/13600818.2019.1575349 Search in Google Scholar

Ajefu, J. B., & Ogebe, J. O. (2021). The effects of international remittances on expenditure patterns of the left-behind households in sub-Saharan Africa. Review of Development Economics, 25(1), 405–429. https://doi.org/10.1111/rode.12721 Search in Google Scholar

Allen, F., Carletti, E., Cull, R., Qian, J. Q., Senbet, L., & Valenzuela, P. (2014). The African financial development and financial inclusion gaps. Journal of African Economies, 23(5), 614–642. https://doi.org/10.1093/jae/eju015 Search in Google Scholar

Ambrosius, C., & Cuecuecha, A. (2013). Are remittances a substitute for credit? Carrying the financial burden of health shocks in national and transnational households. World Development, 46, 143–152. https://doi.org/10.1016/j.worlddev.2013.01.032 Search in Google Scholar

Anderson, E., d’Orey, M. A. J., Duvendack, M., & Esposito, L. (2018). Does government spending affect income poverty? A meta-regression analysis. World Development, 103, 60–71. https://doi.org/10.1016/j.worlddev.2017.10.006 Search in Google Scholar

Anetor, F. O., Esho, E., & Verhoef, G. (2020). The impact of foreign direct investment, foreign aid and trade on poverty reduction: Evidence from sub-Saharan African countries. Cogent Economics & Finance, 8(1), 1737347. https://doi.org/10.1080/23322039.2020.1737347 Search in Google Scholar

Anzoategui, D., Demirgüç-Kunt, A., & Martínez Pería, M. S. (2011). Remittances and financial inclusion: Evidence from El Salvador. World Development, 54, 338–349. https://doi.org/10.1016/j.worlddev.2013.10.006 Search in Google Scholar

Askarov, Z., & Doucouliagos, H. (2020). A meta-analysis of the effects of remittances on household education expenditure. World Development, 129, 104860. https://doi.org/10.1016/j.worlddev.2019.104860 Search in Google Scholar

Banerjee, A. V., Breza, E., Duflo, E., & Kinnan, C. (2017). Do credit constraints limit entrepreneurship? Heterogeneity in the returns to microfinance. Global Poverty Research Lab Working Paper, 17/104. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3126359 Search in Google Scholar

Barajas, A., Chami, R., Fullenkamp, C., Gapen, M., & Montiel, P. J. (2009). Do workers’ remittances promote economic growth? International Monetary Fund. Search in Google Scholar

Bari, M. A., Khan, G. D., Khuram, M. A., Islam, M. J., & Yoshida, Y. (2024). Financial inclusion and expenditure patterns: Insights from slum households in Bangladesh. Cogent Economics & Finance, 12(1), 2312364. https://doi.org/10.1080/23322039.2024.2312364 Search in Google Scholar

Beck, T., Demirgüç-Kunt, A., & Peria, M. S. M. (2007). Reaching out: access to and use of banking services across countries. Journal of Financial Economics, 85(1), 234–266. https://doi.org/10.1016/j.jfineco.2006.07.002 Search in Google Scholar

Beck, T., Levine, R., & Loayza, N. (2000). Finance and the sources of growth. Journal of Financial Economics, 58(1–2), 261-300. https://doi.org/10.1016/S0304-405X(00)00072-6 Search in Google Scholar

Beegle, K., De Weerdt, J., Friedman, J., & Gibson, J. (2012). Methods of household consumption measurement through surveys: Experimental results from Tanzania. Journal of Development Economics, 98(1), 3–18. https://doi.org/10.1016/j.jdeveco.2011.11.001 Search in Google Scholar

Bofondi, M., & Gobbi, G. (2006). Informational barriers to entry into credit markets. Review of Finance, 10(1), 39–67. https://doi.org/10.1007/s10679-006-6978-2 Search in Google Scholar

Bolarinwa, S. T., & Simatele, M. (2023). What levels of informality tackle poverty in Africa? Evidence from dynamic panel threshold analysis. African Journal of Economic and Management Studies, 15(1), 60–72. https://doi.org/10.1108/AJEMS-07-2022-0279 Search in Google Scholar

Brevoort, K. P., & Hannan, T. H. (2006). Commercial lending and distance: Evidence from Community Reinvestment Act data. Journal of Money, Credit and Banking, 38(8), 1991–2012. https://doi.org/10.1353/mcb.2007.0000 Search in Google Scholar

Brown, R. P., & Carmignani, F. (2015). Revisiting the effects of remittances on bank credit: A macro perspective. Scottish Journal of Political Economy, 62(5), 454–485. https://doi.org/10.1111/sjpe.12086 Search in Google Scholar

Burgess, R., & Pande, R. (2005). Do rural banks matter? Evidence from the Indian social banking experiment. American Economic Review, 95(3), 780–795. https://doi.org/10.1257/0002828054201242 Search in Google Scholar

Caner, M., & Hansen, B. E. (2004). Instrumental variable estimation of a threshold model. Econometric Theory, 20(5), 813–843. https://doi.org/10.1017/S0266466604205011 Search in Google Scholar

Cepparulo, A., Cuestas, J. C., & Intartaglia, M. (2017). Financial development, institutions, and poverty alleviation: An empirical analysis. Applied Economics, 49(36), 3611–3622. https://doi.org/10.1080/00036846.2016.1265074 Search in Google Scholar

Chakrabarty, M., & Mukherjee, S. (2022). Financial inclusion and household welfare: An entropy-based consumption diversification approach. The European Journal of Development Research, 34(3), 1486-1521 https://doi.org/10.1057/s41287-021-00431-y Search in Google Scholar

Cole, S., Giné, X., & Vickery, J. (2017). How does risk management influence production decisions? Evidence from a field experiment. The Review of Financial Studies, 30(6), 1935–1970. https://doi.org/10.1093/rfs/hhw080 Search in Google Scholar

Combes, J. L., & Ebeke, C. (2011). Remittances and household consumption instability in developing countries. World Development, 39(7), 1076–1089. https://doi.org/10.1016/j.worlddev.2010.10.006 Search in Google Scholar

Combes, J. L., Ebeke, C. H., Maurel, M., & Yogo, T. U. (2014). Remittances and working poverty. The Journal of Development Studies, 50(10), 1348–1361. https://doi.org/10.1080/00220388.2014.940912 Search in Google Scholar

Corcoran, M., & Hill, M. S. (1980). Unemployment and poverty. Social Service Review, 54(3), 407–413. Search in Google Scholar

Degryse, H., & Ongena, S. (2005). Distance, lending relationships, and competition. The Journal of Finance, 60(1), 231–266. https://doi.org/10.1111/j.1540-6261.2005.00729.x Search in Google Scholar

Demirgüç-Kunt, A., Córdova, E. L., Pería, M. S. M., & Woodruff, C. (2011). Remittances and banking sector breadth and depth: Evidence from Mexico. Journal of Development Economics, 95(2), 229–241. https://doi.org/10.1016/j.jdeveco.2010.04.002 Search in Google Scholar

Demirgüç-Kunt, A., & Levine, R. (2009). Finance and inequality: Theory and evidence. Annual Review of Financial Economics, 1(1), 287–318. https://doi.org/10.1146/annurev.financial.050808.114334 Search in Google Scholar

Dhrifi, A. (2015). Financial development and the Growth-Inequality-Poverty triangle. Journal of the Knowledge Economy, 6(4), 1163–1176. https://doi.org/10.1007/s13132-014-0200-0 Search in Google Scholar

Dollar, D., & Kraay, A. (2002). Growth is good for the poor. Journal of Economic Growth, 7(3), 195–225. https://doi.org/10.1023/A:1020139631000 Search in Google Scholar

Dollar, D., & Kraay, A. (2004). Trade, growth, and poverty. The Economic Journal, 114(493), F22–F49. https://doi.org/10.1111/j.0013-0133.2004.00186.x Search in Google Scholar

Dupas, P., Karlan, D., Robinson, J., & Ubfal, D. (2018). Banking the unbanked? Evidence from three countries. American Economic Journal: Applied Economics, 10(2), 257–297. https://doi.org/10.1257/app.20160597 Search in Google Scholar

Dupas, P., & Robinson, J. (2013). Savings constraints and microenterprise development: Evidence from a field experiment in Kenya. American Economic Journal: Applied Economics, 5(1), 163–192. https://doi.org/10.1257/app.5.1.163 Search in Google Scholar

Easterly, W., & Fischer, S. (2001). Inflation and the poor. Journal of Money, Credit and Banking, 33(2), 160–178. https://doi.org/10.2307/2673879 Search in Google Scholar

GFDD. (2022). Global Financial Development Database. World Bank. https://www.worldbank.org/en/publication/gfdr/gfdr-2016/data/global-financial-development-database Search in Google Scholar

Global Findex. (2021). ). The Global Findex Database 2021: Financial inclusion, digital payments, and resilience in the age of COVID-19. World Bank https://www.worldbank.org/en/publication/globalfindex#sec3 Search in Google Scholar

Gobbi, G., & Zizza, R. (2012). Does the underground economy hold back financial deepening? Evidence from the Italian credit market. Journal of Applied Economics, 31(1), 1–29. https://economiamarche.univpm.it/index.php/em/article/view/16/11 Search in Google Scholar

González, A., Teräsvirta, T., & van Dijk, D. (2004). Panel smooth transition regression model and an application to investment under credit constraints [unpublished manuscript]. Stockholm School of Economics. Search in Google Scholar

Greenwood, J., & Jovanovic, B. (1990). Financial development, growth, and the distribution of income. Journal of Political Economy, 98(5, Part 1), 1076–1107. https://doi.org/10.1086/261720 Search in Google Scholar

Hansen, B. (1999). Threshold effects in non-dynamic panels: Estimation, testing, and inference. Journal of Econometrics, 93(2), 345–368. https://doi.org/10.1016/S0304-4076(99)00025-1 Search in Google Scholar

Inoue, T. (2018). Financial development, remittances, and poverty reduction: Empirical evidence from a macroeconomic viewpoint. Journal of Economics and Business, 96, 59–68. https://doi.org/10.1016/j.jeconbus.2017.12.001 Search in Google Scholar

Inoue, T., & Hamori, S. (2012). How has financial deepening affected poverty reduction in India? Empirical analysis using state-level panel data. Applied Financial Economics, 22(5), 395–408. https://doi.org/10.1080/09603107.2011.613764 Search in Google Scholar

Jalilian, H., & Kirkpatrick, C. (2005). Does financial development contribute to poverty reduction? Journal of Development Studies, 41(4), 636–656. https://doi.org/10.1080/00220380500092754 Search in Google Scholar

Kiendrebeogo, Y., & Minea, A. (2013). Accès aux services financiers et réduction de la pauvreté dans les PED. Revue Économique, 64(3), 483–493. Search in Google Scholar

Kremer, S., Bick, A., & Nautz, D. (2013). Inflation and growth: New evidence from a dynamic panel threshold analysis. Empirical Economics, 44(2), 861–878. https://doi.org/10.1007/s00181-012-0553-9 Search in Google Scholar

Le Goff, M., & Singh, R. J. (2014). Does trade reduce poverty? A view from Africa. Journal of African Trade, 1(1), 5–14. Search in Google Scholar

McKinnon, R. I. (1973). Money and capital in economic development. Brookings Institution. Search in Google Scholar

Meyer, B. D., & Sullivan, J. X. (2011). Further results on measuring the well-being of the poor using income and consumption. Canadian Journal of Economics / Revue Canadienne d’Économique, 44(1), 52–87. https://doi.org/10.1111/j.1540-5982.2010.01623.x Search in Google Scholar

Mwangi, I., & Atieno, R. (2018). Impact of financial inclusion on consumption expenditure in Kenya. International Journal of Economics and Finance, 10(5), 114–128. https://doi.org/10.5539/ijef.v10n5p114 Search in Google Scholar

Nsiah, A. Y., Yusif, H., Tweneboah, G., Agyei, K., & Baidoo, S. T. (2021). The effect of financial inclusion on poverty reduction in sub-Sahara Africa: Does threshold matter? Cogent Social Sciences, 7(1), 1903138. https://doi.org/10.1080/23311886.2021.1903138 Search in Google Scholar

Ochi, A., Saidi, Y., & Labidi, M. A. (2023). Nonlinear threshold effect of governance quality on poverty reduction in South Asia and sub-Saharan Africa: A dynamic panel threshold specification. Journal of the Knowledge Economy, 15, 4239–4264. https://doi.org/10.1007/s13132-023-01271-3 Search in Google Scholar

Okunade, S. O. (2022). Institutional threshold in the nexus between financial openness and TFP in Africa: A dynamic panel analysis. Social Sciences & Humanities Open, 5(1), 100245. https://doi.org/10.1016/j.ssaho.2021.100245 Search in Google Scholar

Otchere, I., Senbet, L., & Simbanegavi, W. (2017). Financial sector development in Africa-an overview. Review of Development Finance, 7(1), 1–5. https://doi.org/10.1016/j.rdf.2017.04.002 Search in Google Scholar

Quartey, P. (2008). Financial sector development, savings mobilization and poverty reduction in Ghana. In B. Guha-Khasnobis & G. Mavrotas (Eds.), Financial development, institutions, growth and poverty reduction (pp. 87–119). Springer https://doi.org/10.1057/9780230594029_5 Search in Google Scholar

Ramcharran, H. (2020). Analyzing the impact of workers’ remittances on household consumption in Latin American and Caribbean Countries. Journal of Economics and Finance, 44(1), 59–77. https://doi.org/10.1007/s12197-019-9468-z Search in Google Scholar

Ratha, D. K., De, S., Kim, E. J., Plaza, S., Seshan, G. K., Shaw, W., & Yameogo, N. D. (2019). Leveraging economic migration for development: A briefing for the World Bank Board. http://documents.worldbank.org/curated/en/461021574155945177 Search in Google Scholar

Ratha, D. K., De, S., Schuettler, K., Seshan, G. K., & Yameogo, N. D. (2018). Migration and remittances: Recent developments and outlook-transit migration. World Bank Group. Search in Google Scholar

Ravallion, M., & Datt, G. (2002). Why has economic growth been more pro-poor in some states of India than others? Journal of Development Economics, 68(2), 381–400. https://doi.org/10.1016/S0304-3878(02)00018-4 Search in Google Scholar

Regmi, A., & Meade, B. (2013). Demand side drivers of global food security. Global Food Security, 2(3), 166–171. https://doi.org/10.1016/j.gfs.2013.08.001 Search in Google Scholar

Sehrawat, M., & Giri, A. (2016). Financial development, poverty and rural-urban income inequality: Evidence from South Asian countries. Quality and Quantity, 50(2), 577–590. https://doi.org/10.1007/s11135-015-0164-6 Search in Google Scholar

Seo, M. H., & Shin, Y. (2016). Dynamic panels with threshold effect and endogeneity. Journal of Econometrics, 195(2), 169–186. https://doi.org/10.1016/j.jeconom.2016.03.005 Search in Google Scholar

Shaw, E. S. (1973). Financial deepening in economic development. The Journal of Finance, 29(4), 1345–1348. Search in Google Scholar

Stiglitz, J. E. (1998). The role of the state in financial markets. The World Bank Economic Review, 7(1), 19–52. https://doi.org/10.1093/wber/7.suppl_1.19 Search in Google Scholar

Uddin, G. S., Shahbaz, M., Arouri, M., & Teulon, F. (2014). Financial development and poverty reduction nexus: A cointegration and causality analysis in Bangladesh. Economic Modelling, 36, 405–412. https://doi.org/10.1016/j.econmod.2013.09.049 Search in Google Scholar

World Bank. (1990). World development report: Poverty. World Bank Group. Search in Google Scholar

World Bank. (2018). Poverty and shared prosperity 2018: Piecing together the poverty puzzle. https://www.worldbank.org/en/publication/poverty-and-shared-prosperity-2018 Search in Google Scholar

World Bank. (2020). World Development Indicators. https://databank.worldbank.org/source/world-development-indicators Search in Google Scholar