Addressing the effect of workers’ remittance on economic growth: evidence from MENA countries

Hajer Kratou and Kaouthar Gazdar
Additional contact information
Hajer Kratou: CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique
Kaouthar Gazdar: LEFA-IHEC - Faculty of Economics and Management of Sousse - University of Sousse

Post-Print from HAL

Abstract: Purpose – The purpose of this paper is to study the effect of remittances on economic growth in MENA region. More precisely this study tries first to explore the short-run and the long-run relationship between remittances and economic growth. Second, the authors address how the local financial development and institutional environment influence a country's capacity to take advantage from remittances. Design/methodology/approach – The panel data unit-root test as well as the panel data co-integration is used for the purpose of the long-run remittances growth relationship and the IV technique with GMM option is adopted to study the short-run link. Findings – This paper provides empirical evidence that remittances have a positive effect on economic growth in the long run and a negative effect in short run. The short-run effect of remittances on economic growth is conditional. In fact, it depends in the levels of financial development and institutional quality, respectively. Practical implications – As practical implications, policy interventions, to improve the functioning of governance institutions, enforcing regulation and political stability, enhancing financial system and socio-economic environment are also crucial for increasing the benefit effects of remittances. Originality/value – The research is an extension of previous evidence in two ways; the authors have examined the long-run and short-run remittances-growth relationship in the first time. In the second time, the authors have explored the conditional remittances-growth relationship in MENA countries. Specifically, the authors have examined whether the remittances-growth nexus is affected by financial development and institutional quality levels in MENA countries.

Keywords: Economic growth; Institutions and institutional analysis; Financial Development; Remittances (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (13)

Published in International Journal of Social Economics, 2016, 43 (1), pp.51-70

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01400524

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().