Empirical evidence on the relationship between migrants' remittances and private investment in Burkina Faso: A dynamic simultaneous equation model

Abstract

This research explores the channels through which migrant remittances can promote private investment. The research method favours a dynamic simultaneous equation model estimated using a combination of the bootstrap method and the three‐stage least squares estimator to account for the interdependence between remittances and private investment. The study area is Burkina Faso, and the period of analysis covers the period 1985–2021. One of the main findings is that the level of corruption risk and the demographic dependency ratio are important transmission channels. Findings suggest creating an institutional framework that enhances the level of transparency and accountability and accelerates the demographic transition process.