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Higher education investment, human capital, and high-quality economic development

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  • Ma, Lianfeng
  • Gan, Yufei
  • Huang, Ping

Abstract

While extensive research has examined economic growth in China, the complex relationship between knowledge-based inputs and comprehensive development remains poorly understood, particularly at the provincial level. Previous studies have largely focused on traditional economic indicators, overlooking how education investment and human capital collectively shape multidimensional development outcomes across China's diverse regions. To address this gap, we construct a novel development index incorporating innovation, sustainability, and social progress metrics, analyzing panel data from 31 Chinese provinces (2000–2020) through two-way fixed effects models with instrumental variables. Our findings reveal that higher education investment significantly enhances comprehensive development, with this effect amplified in regions with greater human capital accumulation. Notably, regional heterogeneity analysis demonstrates stronger investment effectiveness in eastern provinces compared to central regions, while western provinces show no significant relationship. These results underscore the importance of regionally differentiated approaches to educational investment and human capital development, offering valuable insights for policymakers seeking to promote balanced growth across China's economically diverse landscape.

Suggested Citation

  • Ma, Lianfeng & Gan, Yufei & Huang, Ping, 2025. "Higher education investment, human capital, and high-quality economic development," Finance Research Letters, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:finlet:v:71:y:2025:i:c:s154461232401448x
    DOI: 10.1016/j.frl.2024.106419
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    References listed on IDEAS

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    More about this item

    Keywords

    Regional development; Education policy; Human capital accumulation; Economic transformation; Development indicators;
    All these keywords.

    JEL classification:

    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education

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