Towards an encompassing concept of remittance in the digital era : assessing the role of formal banking and mobile money accounting in its spatial flow

Drawing from capital mobility theory, this article adopts an encompassing view on remittance that covers both domestic and international financial transfers, to retrospectively explore and evaluate the relative influences of formal banking (FB) and mobile money accounting (MMA) on the extensive supply of remittances from individuals living within the economic community of the West African states (ECOWAS), during the COVID-19 pandemic. To that end, the study uses random utility maximization to model ECOWAS level data extracted from the 2021 Global Findex Survey. The results show that FB and MMA had respectively 12.2% and 54.5% positive impacts on the marginal utilities (MUs) individuals derive from supplying remittances. The comparative evaluation of the two remittance channels suggested that FB and MMA were neither substitutes, nor complements into the individual's extensive supply function of remittances within ECOWAS. However, MMA was found to be 4.47 times more effective than FB, at driving outbound remittance behavior. Additionally, the findings revealed a significant income gradient in outbound remittance behavior; as well as highlighting a 22.4% gender based gradient in remittance sending in favor of females; and a 6.4% regional gradient favoring urban residents. Moreover, the econometric findings suggested that expending financial inclusion through easing access to key financial products and services; as well as government welfare programs, and employment income, significantly increased the likelihood of remittance sending within the ECOWAS bloc. Hence, important implications for endogenous regional growth and future research are discussed.