Authors: Gloria Clarissa O. Dzeha; Festus Ebo Turkson; Elikplimi Komla Agbloyor; Joshua Yindenaba Abor
Addresses: Department of Banking and Finance, Central University, Accra, Ghana ' Department of Economics, University of Ghana, Accra, Ghana ' Department of Finance, University of Ghana, Accra, Ghana ' Department of Finance, University of Ghana, Accra, Ghana
Abstract: Using panel data of 21 African countries over the period 2010-2014, we examine the effect of total factor productivity (TFP) on human development contingent on the level of remittances in Africa. We contribute to literature in three folds: 1) we conceptualise how remittance impact human development through TFP; 2) we empirically test the interactive effect of remittance and TFP on human development using the system generalised methods of moments (SGMM); 3) we used the inequality-adjusted human development index as a proxy for human development which is a better measure. We find that TFP has a negative effect on human development whilst remittances have a positive effect. Their interaction effect turns out to be positive suggesting that countries that receive higher remittances are able to transform the negative impact of TFP into a positive one.
Keywords: remittance; TFP growth; human development; inequality-adjusted human development index; IHDI; system generalised methods of moments; SGMM; Africa.
African Journal of Economic and Sustainable Development, 2018 Vol.7 No.1, pp.47 - 72
Received: 24 Apr 2018
Accepted: 16 Sep 2018
Published online: 04 Feb 2019 *