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Do Remittances Matter in Accelerating Labour Productivity and Capital Accumulation?

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Abstract

In this paper, we examine the effect of remittances on labour productivity and capital accumulation through various channels. Our panel includes 25 African countries with data from 1990 to 2013. We employ the two-step generalized methods of moments estimator. The main results from this study are that remittances on their own do promote labour productivity but not capital accumulation. Indeed, remittances are observed to have a positive impact on labour productivity and a negative impact on capital accumulation. Moreover, remittances do not promote labour productivity in the presence of high natural resource endowment. The effect of remittances on labour productivity is not clear when we interact remittances with life expectancy. Further, remittances tend to promote capital accumulation in the presence of high quality human capital.

Policies that promote remitting through formal channels will aid directing remittance inflows into productive investments thus encouraging labour productivity.

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Authors and Affiliations

  1. Department of Finance, University of Ghana, Accra, Ghana

    Gloria Clarissa O. Dzeha, Joshua Y Abor & Elikplimi K. Agbloyor

  2. Department of Economics, University of Ghana, Accra, Ghana

    Festus Ebo Turkson

Authors
  1. Gloria Clarissa O. Dzeha
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  2. Joshua Y Abor
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  3. Festus Ebo Turkson
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  4. Elikplimi K. Agbloyor
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Correspondence to Gloria Clarissa O. Dzeha .

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Editors and Affiliations

  1. Development Finance Centre, UCT Graduate School of Business, Cape Town, Western Cape, South Africa

    Nicholas Biekpe

  2. Institute of Development Policy and Management, Universiteit Antwerpen, Antwerp, Belgium

    Danny Cassimon

  3. Department of Finance Birmingham Business School, University of Birmingham, Birmingham, United Kingdom

    Andrew William Mullineux

Appendices

Appendices

Appendix 9.1 Sampled African countries and their labour productivity growth
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Appendix 9.2 Control variables
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Dzeha, G.C.O., Abor, J.Y., Turkson, F.E., Agbloyor, E.K. (2017). Do Remittances Matter in Accelerating Labour Productivity and Capital Accumulation?. In: Biekpe, N., Cassimon, D., Mullineux, A. (eds) Development Finance. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-54166-2_9

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  • DOI: https://doi.org/10.1007/978-3-319-54166-2_9

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