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Is Productivity Affected by Remittances? The Evidence from Morocco

Farid Makhlouf ()

Journal of International Development, 2019, vol. 31, issue 2, 211-222

Abstract: Empirical results yield mixed evidence of the effect of remittances on economic growth in countries of origin. This note assesses the potential impact of remittance instability on total factor productivity in Morocco. It uses a threshold vector autoregression model for the period 1975–2014. Remittances are used as a threshold variable. Results show that the response of total factor productivity to shock in remittances is positive and stronger when those remittances exceed the value of 5.132 per cent of GDP with the reverse effect when they are lower than the threshold value. Public authorities may enhance remittances to accelerate a country's development. © 2018 John Wiley & Sons, Ltd.

Date: 2019
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Handle: RePEc:wly:jintdv:v:31:y:2019:i:2:p:211-222