The impact of remittances on household investment in Nigeria

Abstract

Remittances are monetary and non-monetary items that migrants send to members of their respective families and communities in their countries of origin. Several studies have argued that remittances rarely fund productive investment while others argued otherwise. Previous studies have focused on the impact of the aggregate remittances on households’ investment without considering the roles of the different types of remittances like aggregate, cash, food and other remittances on households’ investment in Nigeria. This study was therefore designed to analyse the impact of the various types of remittances on households’ investment in the rural areas, urban areas and in the geo-political zones of Nigeria. Data were obtained from the Harmonised Nigerian Living Standard Survey of 2009/2010. The study was premised on the Investment Theory. The Ordinary Least Squares (OLS) technique was used in estimating the model and probit regression was used as robustness check of the OLS estimate. Instrumental variable test was used to verify the existence of endogeneity in the model. The impacts of the aggregate, cash, food and other remittances on households’ investments are chequered in the rural areas, urban areas and in the geo-political zones of Nigeria. Corresponding author: Ohiomoje Iyemifokhae Abubakar Email address for corresponding author: ohiomoje@yahoo.com First submission received: 21st July 2019 Revised submission received: 6th September2019 Accepted: 30th September 2019