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Research Article Open access CC BY 4.0

Migrant Remittances and Economic Growth: The Role of Financial Efficiency

Ningaye Paul, Abba Yadou Barnabé, Balla Mekongo Célestin Ghislain

South Asian Journal of Social Studies and Economics · pp. 48–59 · Published 13 Jul 2020

10.9734/sajsse/2020/v7i130183

Abstract

The objective of this paper is to examine the relationship between migrant remittances and economic growth by considering the role of financial efficiency in 34 African countries from 1995 to 2016. The methodology is based on a GMM system model and a Pooled Mean Group (PMG) on a sample of 34 African countries. The empirical results show us the following conclusions: (i) Migrant remittances and financial efficiency have a positive impact on economic growth. (ii) The interaction between remittances and financial efficiency has a negative impact on economic growth. (iii) Migrant remittances have a long-term impact on economic growth. (iv) The combined effect of migrant remittances and financial efficiency has a negative impact on economic growth. Moreover, this impact is more pronounced in low-and middle-income countries. To better benefit from migrant remittances, recipient countries need to focus on financial development.

Migrant remittances financial efficiency growth GMM in system.

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