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Human Capital-Economic Growth Nexus in Africa: Heterogeneous Panel Causality Approach

Author

Listed:
  • Emmanuel Anoruo

    (Accounting and Management Information Systems, Coppin State University, Baltimore, Maryland, USA,)

  • Uchenna Elike

    (Department of Economics and Finance, Alabama A&M University, Normal, Alabama, USA.)

Abstract

This paper examines the causal relationship between human capital (HC) and economic growth (EG) for a panel 29 African countries. In particular, the study applied theoretically consistent panel unit root procedures and panel co-integration tests that account for the presence of cross-sectional dependency among the members of a panel. To ascertain the direction of causality between HC and EG, the study applies the heterogeneous panel causality test proposed by Dumitrescu and Hurlin. This test has the ability to control for the presence of both heterogeneity and cross-sectional dependence that might be present in the panel. To determine the signs of the relationship between the two variables, the study applied the dynamic ordinary least square (OLS). The results from the heterogeneous panel causality test provide evidence in support of bidirectional causality between HC and EG for the sample countries. The results from the dynamic OLS indicate that HC and EG have significantly positive effect on each other. This finding reinforces the need for the sample countries to work in tandem in promoting education as an engine of EG.

Suggested Citation

  • Emmanuel Anoruo & Uchenna Elike, 2015. "Human Capital-Economic Growth Nexus in Africa: Heterogeneous Panel Causality Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 5(4), pages 1017-1023.
    • Handle: RePEc:eco:journ1:2015-04-22
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    References listed on IDEAS

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    4. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    5. Awel, Ahmed Mohammed, 2013. "The long-run Relationship between Human Capital and Economic Growth in Sweden," MPRA Paper 45183, University Library of Munich, Germany.
    6. Robert J. Barro, 2001. "Human Capital and Growth," American Economic Review, American Economic Association, vol. 91(2), pages 12-17, May.
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    Cited by:

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    2. Muhammad Ibrahim Shah, 2021. "Investigating the Role of Regional Economic Integration on Growth: Fresh Insights from South Asia," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 13(1), pages 35-57, January.
    3. Chang-Hwan Choi & Xuan Zhou & Jung-O Ko, 2023. "Can Human Capital Drive Sustainable International Trade? Evidence from BRICS Countries," Sustainability, MDPI, vol. 16(1), pages 1-11, December.

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    More about this item

    Keywords

    Human Capital; Economic Growth; Panel Data Causality; Africa;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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