Does Workers’ Remittances Affect Growth: Evidence from Seven MENA Labor Exporting Countries

This paper presents an empirical examination of effects of workers’ remittance on
economic growth in a sample of 7 remittance-receiving MENA countries. In order to
empirically analyze the impact of remittances we estimate growth equations using a set of 7
MENA labor exporting countries during the period 1975-2006. A standard growth models
are estimated using both fixed-effects and random effects models. The empirical results
show the support of the fixed –effects method as the random effects model is rejected in
statistical tests. The results show the support for the view that remittances have a positive
impact on growth both directly and indirectly through their interactions with financial and
institutional channels.