Remittances, Financial Development and Economic Growth: The Case of North African Countries

Abida Zouheir and Imen Mohamed Sghaier

Romanian Economic Journal, 2014, vol. 17, issue 51, 137-170

Abstract: The present paper examines the causal linkage between remittances, financial development, and economic growth in a panel of 4 countries of North Africa (Tunisia, Morocco, Algeria and Egypt) over the period 1980-2011. Using system Generalized Method of Moment (GMM) panel data analysis, we find strong evidence of a positive relationship between remittances and economic growth. We also find evidence that remittances appear to be working as a complement to financial development and, moreover, that the effect of remittances is more pronounced in the presence of the financial development variable. The policy implications of this study appeared clear. Improvement efforts need to be driven by local-level reforms to ensure the development of domestic financial system in order to take advantage of remittances.

Keywords: remittances; financial development; economic growth; panel data analysis (search for similar items in EconPapers)
JEL-codes: E21 F21 F34 J61 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:rej:journl:v:17:y:2014:i:51:p:137-170

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