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Remittances, Institutions, and Economic Growth in North African Countries

Author

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  • Nahed Zghidi

    (University of Sfax)

  • Imen Mohamed Sghaier

    (University of Sfax)

  • Zouheir Abida

    (University of Sfax)

Abstract

This paper seeks to investigate the causal links between remittances, economic freedom, and economic growth on a panel of four North African countries, namely, Tunisia, Morocco, Algeria, and Egypt from 1980 to 2012. Using the system generalized method of moments (GMM) in a panel data analysis, we found strong evidence of a positive relationship between remittances and economic growth. We also found that economic freedom appears to be working as a complement to remittances and, 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 benefit more from the presence of remittances.

Suggested Citation

  • Nahed Zghidi & Imen Mohamed Sghaier & Zouheir Abida, 2018. "Remittances, Institutions, and Economic Growth in North African Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 9(3), pages 804-821, September.
    • Handle: RePEc:spr:jknowl:v:9:y:2018:i:3:d:10.1007_s13132-016-0377-5
    DOI: 10.1007/s13132-016-0377-5
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    More about this item

    Keywords

    Remittances; Economic freedom index; Economic growth; Panel data;
    All these keywords.

    JEL classification:

    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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