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Foreign Financial Flows, Human Capital and Economic Growth in North African Countries

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  • Imen Mohamed Sghaier

    (Higher Institute of Business Administration, University of Sfax, Tunisia)

Abstract

The purpose of this study is to analyze the relationship between foreign financial flows (i.e., FDI inflows and remittances), human capital, and its effects on economic growth in 4 North African countries. Annual panel data from 2000 to 2018 are examined using the system GMM. First, we found strong evidence of a positive link between FDI and economic growth. Moreover, the results indicate that the complementarity between FDI and human capital positively influences economic growth. Second, the remittances are found to be positive factors for economic growth. In fact, higher human capital accumulation of receiving countries increases these positive impacts. Overall, the results indicate that foreign financial flows are positively correlated with human capital in influencing economic growth in the North African countries. Therefore, it becomes pertinent for policymakers to pursue a human capital policy to improve their absorptive capacities to exploit full benefits of foreign financial flows.

Suggested Citation

  • Imen Mohamed Sghaier, 2021. "Foreign Financial Flows, Human Capital and Economic Growth in North African Countries," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 3, pages 355-371, September.
    • Handle: RePEc:nwe:eajour:y:2021:i:3:p:355-371
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    More about this item

    Keywords

    economic growth; FDI; human capital; remittances;
    All these keywords.

    JEL classification:

    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • N97 - Economic History - - Regional and Urban History - - - Africa; Oceania
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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