Remittances, Economic Freedom, and Economic Growth in North African Countries

Nahed Zghidi and Zouheir Abid

Romanian Economic Journal, 2015, vol. 18, issue 58, 139-162

Abstract: This contribution investigates the causal interactions between foreign direct investment (FDI), economic freedom and economic growth in a panel of 4 countries of North Africa (Tunisia, Morocco, Algeria and Egypt) from 1980 to 2012. Using System Generalized Method of Moment (GMM) panel data analysis, we find strong evidence of a positive link between remittances and economic growth. We also find evidence that economic freedom appear to be working as a complement to remittances and, moreover, that the effect of remittances is more pronounced in the presence of the economic freedom variable. Thus, to the extent that remittances have become a major source of external development finance, policies promoting greater freedom of economic activities gain significantly from the presence of remittances.

Keywords: Economic freedom index; remittances; economic growth; Panel data analysis. (search for similar items in EconPapers)
JEL-codes: C23 F24 O10 O43 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:rej:journl:v:18:y:2015:i:58:p:139-162

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