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Governance thresholds and the human capital–growth nexus

Author

Listed:
  • Nicholas Apergis
  • Ghulam Mustafa
  • Muhammad Khan

Abstract

Purpose - The literature that explores the relationship between human capital and economic growth has produced mixed results. It highlights the puzzle on the correlations between human capital and economic growth. This study contributes to this debate by offering an explanation of the puzzling effects. Design/methodology/approach - Using the threshold model proposed by Kremeret al.(2013), the results document that there is a threshold effect in the human capital–growth nexus. Findings - The findings illustrate that the relationship between human capital and economic growth is weakly positive up to a certain threshold level of governance; however, the relationship turns out to be positive once the threshold level has been achieved. Originality/value - The mixed evidence on the human capital–growth relationship can be explained through institutional quality differences. The findings recommend that better governance is complementary to contribute to the productive use of human capital in achieving higher economic growth.

Suggested Citation

  • Nicholas Apergis & Ghulam Mustafa & Muhammad Khan, 2021. "Governance thresholds and the human capital–growth nexus," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 49(7), pages 1181-1196, October.
    • Handle: RePEc:eme:jespps:jes-03-2021-0150
    DOI: 10.1108/JES-03-2021-0150
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    More about this item

    Keywords

    Human capital; Economic growth; Governance; Nonlinear modeling; E02; E23; O43;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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