The Mitigating Role in Financial Depth on the Remittances-ESG Nexus: How Financial Development Offsets the Negative Impact in OECD Countries
Şu kitabın bölümü:
Yılmaz,
N.
(ed.)
2026.
Finans Alanında Güncel Çalışmalar.
Özet
This manuscript examines the influence of remittance inflows and financial development on Environmental, Social, and Governance (ESG) performance utilizing annual panel data from 35 OECD nations spanning 2000-2023. The dependent variable is the national-level ESG score, whereas remittance inflows (expressed as a percentage of GDP) and financial depth, quantified by domestic credit to the private sector, function as the principal independent variables. The model incorporates an interaction term between financial depth and remittances to encapsulate the moderating function of financial development. GDP per capita, inflation, and trade openness are included as control variables to account for economic progression, macroeconomic stability, and international trade exposure. The Augmented Mean Group (AMG) estimator, selected for its resilience to cross-sectional dependence, heteroscedasticity, and parameter heterogeneity, discloses that remittances exert a statistically significant negative direct effect on ESG performance (β =-0.24, p <0.05). Nevertheless, the interaction term between financial depth and remittances is positive and marginally significant (β = 0.05, p <0.10), indicating that financial depth alleviates the detrimental impact of remittance inflows on ESG outcomes. Among control variables, GDP (β = 0.04, p <0.01) and trade openness (β = 0.01, p <0.01) exhibit significant positive correlations with ESG performance. The Dumitrescu-Hurlin panel causality test corroborates unidirectional causality from remittances to ESG scores (z = 2.95, p <0.01), reinforcing the credibility of the findings. Overall, the results elucidate that financial depth assumes a pivotal moderating role, transforming the remittance-ESG nexus and enhancing nations' sustainability performance through well-developed financial infrastructure.
