PhD seminar: Kabinet Kaba

Remittances and Industrialization in Africa: Evidence from Manufacturing Firms Data

Coauthor : Mahamat Moustapha

Discussants: Jean Louis Combes, Tarna Silue

Abstract

In this paper, we examine the effect of sub-Saharan Africa’s new main source of external finance,namely remittances, on industrialization. Using a fixed-effects instrumental variable approach andfirm survey data, we first find that international remittances increase both capital acquisition bynationals in existing manufacturing firms (intensive margin) and the entry of new manufacturingfirms into the market (extensive margin). Second, the results show a negative effect of internationalremittances on the sales of manufacturing firms. Third, a positive effect of international remittanceson employment in manufacturing firms is highlighted. Finally, the results are robust to the changeof remittances’ measure and the exclusion of over-represented and most industrialized countries.

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