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Workers’ Remittances, Governance Institution and Private Investment in Nigeria

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Author(s): Ebenezer A Olubiyi

Journal: Review of Finance and Banking
ISSN 2067-2713

Volume: 5;
Issue: 1;
Start page: 63;
Date: 2013;
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Keywords: Workers’ Remittances | Investment | governance institution | Generalized Method of Moment (GMM)

ABSTRACT
Workers’ remittances have been identified as an important investment driver, by easing credit availability and lowering cost of investment. However, the literature suggests that governance institutions play a crucial role in how this inflow affects investment. Nigeria has been experiencing continuous increase in workers’ remittances over time while the level of investment is still low. This work sought to investigate the role of governance in the remittance-investment nexus in Nigeria. A GMM estimation technique was adopted to estimate a simplified institutional framework. The result shows that remittances performed better in influencing investment when governance institution improves. Hence, government is encouraged to improve the state of governance in Nigeria.
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