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Remittances, Financial Development and Economic Growth - A Dynamic Panel Data Approach

Rahmije Mustafa Topxhiu & Florentina Xhelili Krasniqi

Contemporary Economics2025https://doi.org/10.5709/ce.1897-9254.562article
AJG 1ABDC C
Weight
0.41

What the paper says

This study investigates the relationships between remittances, financial development, and economic growth in Western Balkan countries during 2002-2022. Employing a dynamic panel data approach, the research encompasses a multi-faceted regression strategy, including Ordinary Least Squares (OLS), Fixed Effects, and Two-Stage Least Squares (2SLS) models. This approach is particularly designed to address potential endogeneity issues in remittances and financial development indicators. The analysis reveals that remittances have been a significant growth driver in the Western Balkans, with their impact being more pronounced in countries with less developed financial systems. This finding suggests a substitutive relationship between remittances and financial development. The study also indicates that financial development, measured through Money Supply and Net Interest Margin, has a complex and unclear impact on economic growth. The interaction between remittances and financial development is also a focal point, with significant negative coefficients indicating that in regions with limited financial development, remittances play a crucial role in filling the gaps left by inefficient financial markets. The study contributes to the understanding of how remittances and financial development interact and influence economic growth, providing valuable insights for policy formulation in the Western Balkans.

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https://doi.org/https://doi.org/10.5709/ce.1897-9254.562

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@article{rahmije2025,
  title        = {{Remittances, Financial Development and Economic Growth - A Dynamic Panel Data Approach}},
  author       = {Rahmije Mustafa Topxhiu & Florentina Xhelili Krasniqi},
  journal      = {Contemporary Economics},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.5709/ce.1897-9254.562},
}

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Evidence weight

0.41

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.25 × 0.4 = 0.10
M · momentum0.55 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.