Abstract

This study examined the effect of remittances, both internal and external, on the acquisition of productive assets using primary household survey data collected from remittance recipients and non-recipients in TA Kaluluma's area in Kasungu district. It sought to test the hypothesis that in the context of financial markets imperfections, remittances in rural areas do not have a positive and significant effect on productive asset acquisition. While adopting a productive asset acquisition model, a productive asset index was constructed to measure the productive assets acquired by households. Data was collected by means of a household survey using a questionnaire and semi-structured interviews using interview guides. Statistical analysis, using difference between means, tests of correlation, Chi-square, and regression analysis was used to analyse quantitative data from the household survey. Qualitative data from semi-structured interviews was analysed using content analysis. After controlling for particular household characteristics, results showed that remittances had a positive and significant effect on productive asset acquisition, particularly agricultural equipment, with productive asset acquisition increasing from the remittances and recipients having a higher productive asset index than non-recipients. These findings suggest that remittances can be used to boost the productive capacities of rural households through asset acquisition and, thus, an increased flow of remittances to migrant communities of origin may help to achieve economic independence and the acquisition of productive assets.

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School	: School of Law, Economics and Government
Issued Date	: 2015

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