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Migrant Remittances and Economic Growth: The Role of Financial Development and Institutional Quality

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  • Imad El Hamma

Abstract

[eng] This paper investigates the conditional effects of remittances on economic growth in 14 Middle East and North Africa (MENA) countries. Using unbalanced panel data over the period 1982 2016, we study the hypothesis that the effect of remittances on economic growth varies depending on the level of financial development and institutional environment in recipient countries. We use Two Stage Least Squares (2SLS/IV) instrumental variables method in which we address the endogeneity of remittances. Our results reveal a complementary relationship between financial development and remittances to ensure economic growth. The estimations show that remittances promote growth in countries with a developed financial system and a strong institutional environment.

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  • Imad El Hamma, 2018. "Migrant Remittances and Economic Growth: The Role of Financial Development and Institutional Quality," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 503-504, pages 123-142.
    • Handle: RePEc:nse:ecosta:ecostat_2018_503-504_8
    DOI: https://doi.org/10.24187/ecostat.2018.503d.1961
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    2. Destek, Mehmet Akif & Adedoyin, Festus & Bekun, Festus Victor & Aydin, Sercan, 2023. "Converting a resource curse into a resource blessing: The function of institutional quality with different dimensions," Resources Policy, Elsevier, vol. 80(C).
    3. Folorunsho M. Ajide & Tolulope T. Osinubi, 2022. "Foreign aid and entrepreneurship in Africa: the role of remittances and institutional quality," Economic Change and Restructuring, Springer, vol. 55(1), pages 193-224, February.
    4. Wadad Saad & Hassan Ayoub, 2019. "Remittances, Governance and Economic Growth: Empirical Evidence from MENA Region," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 11(8), pages 1-1, August.
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    6. Imen Mohamed Sghaier, 2021. "Remittances and Economic Growth in MENA Countries: The Role of Financial Development," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 1, pages 43-59, March.
    7. Diby Francois Kassi & Yao Li & Zhankui Dong, 2023. "The mitigating effect of governance quality on the finance‐renewable energy‐growth nexus: Some international evidence," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(1), pages 316-354, January.
    8. Louis Bernard Tchekoumi & Patrick Danel Nya, 2023. "Remittances and economic growth: What lessons for the CEMAC zone?," Cogent Economics & Finance, Taylor & Francis Journals, vol. 11(1), pages 2191448-219, December.
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    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O22 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis

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