Impact of Remittances on Financial Development: Revisiting the Evidence for ECOWAS Countries

This study examines the impact of remittances on financial development in selected West African countries over the period from 1980 to 2017. Contrary to previous panel studies which relied on standard panel estimators, it uses an estimation method which controls both parameter heterogeneity and cross-section dependence among countries. Remittance inflows were found to reduce domestic credit to private sector whereas they contribute to increasing money supply in the long run. Country-level results reveal, however, considerable heterogeneity across countries.