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Human Capital Investment and Economic Growth in Saudi Arabia: Error Correction Model

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  • Abla A. H. Bokhari

    (Department of Economics, Faculty of Economics and Administration, King Abdulaziz University, Jeddah, Saudi Arabia.)

Abstract

To examine the relationship between investment in human capital and economic growth in the Kingdom of Saudi Arabia for the period 1970-2014. Quantitative research design has been implemented. Granger Causality approach has been employed, followed by error correction model. The data stationarity and integration order have been tested, using the augmented Dickey-Fuller. Any long-run or short-run causality was not observed between expenditure on education and economic growth (per capita gross domestic product). 73.6% variation has been indicated by fixed capital formation of gross national product, which is considered as an effective aspect. The results indicated that results are statistically significant with P value (0.000) at 5% level of significance. Investment in human capital, with the right policy assessments and rehabilitation, can be translated into an essential element of growth in the Saudi economy

Suggested Citation

  • Abla A. H. Bokhari, 2017. "Human Capital Investment and Economic Growth in Saudi Arabia: Error Correction Model," International Journal of Economics and Financial Issues, Econjournals, vol. 7(4), pages 104-112.
    • Handle: RePEc:eco:journ1:2017-04-15
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    10. Éva Berde & Izabella Kuncz, 2017. "Possible Paths for GDP Per Capita – Simulation with a Demographic Growth Model," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 16(4), pages 36-57.
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    More about this item

    Keywords

    Economic Growth; Human Capital; Error Correction model;
    All these keywords.

    JEL classification:

    • G0 - Financial Economics - - General
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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