Beyond remittances: The role of trade and human capital

This study examines the impact of remittances on economic growth in a panel of 34 Sub-Saharan African countries over the period 1985–2017 using a System GMM estimator. The results show that remittances exert a negative and significant effect on economic growth. The findings further reveal that the relationship between remittances and growth is nonlinear and depends on human capital and trade openness. In addition, trade openness, population growth, and inflation are identified as key determinants of economic growth. The results also suggest that imports constitute an important channel through which remittances influence growth. These findings are robust to alternative specifications. The study highlights the need for policies that enhance the productive use of remittances, particularly through investment promotion, trade openness, and human capital development.