Migrant Remittances and Economic Growth: The Role of Financial Efficiency
Ningaye Paul
University of Dschang, Cameroon.
Abba Yadou Barnabé *
University of Dschang, Cameroon.
Balla Mekongo Célestin Ghislain
University of Dschang, Cameroon.
*Author to whom correspondence should be addressed.
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.
Keywords: Migrant remittances, financial efficiency, growth, GMM in system.