Open AccessRemittances and Economic Growth in MENA Countries: The Role of Financial Development
Author(s) -
Imen Mohamed Sghaier
Publication year - 2021
Publication title -
economic alternatives
Language(s) - English
Resource type - Journals
eISSN - 2367-9409
pISSN - 1312-7462
DOI - 10.37075/ea.2021.1.03
Subject(s) - remittance , economics , panel data , generalized method of moments , middle east , financial sector development , international economics , development economics , financial sector , monetary economics , economic growth , finance , political science , econometrics , law
This paper investigates the conditional effects of remittances on economic growth in 7 MENA countries, namely, Tunisia, Morocco, Algeria, Egypt, Jordan, Lebanon, and Turkey from 2000 to 2018. 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 financial development acted as a complement in the remittances-growth relationship. A clearer understanding of the channels through which remittance flows will enhance economic growth in the MENA region may assist policymakers to formulate appropriate policies. In particular, a policy environment that promotes financial system development would serve to attract more remittances.