Are Remittances to Sub-Saharan Africa Altruistic or for Self-Interest? Evidence from Kenya

Chien-Ping Chen, John Kagochi

Abstract


International remittances comprise significant financial inflow for many Sub-Saharan African (SSA) countries and provide considerable disposable income for the receiving households. There has, however, been no consensus on the motivation in the part of sending migrants in which explanations are divided between altruism and self-interest. The study employs Autoregressive Distributed Lag (ARDL) model with co-integration approach to investigate whether international remittances to Kenya can be explained by either altruistic or self-interest motive. We process the World Bank annual data from 1970 to 2010 and find that self-interest, not altruism, as the dominant motivation to determine remittances. The analysis also indicates that demand on housing and exchange rates are the two strong drivers of international remittances to Kenya in both short-run and long-run. The Kenyan government is supposed to facilitate savings from remittances through financial institutions to invest more in the small business sector for economic growth.


Full Text: PDF DOI: 10.5539/ijef.v5n12p70

Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.

International Journal of Economics and Finance  ISSN  1916-971X (Print) ISSN  1916-9728 (Online)

Copyright © Canadian Center of Science and Education

To make sure that you can receive messages from us, please add the 'ccsenet.org' domain to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', check your 'bulk mail' or 'junk mail' folders.