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Human Capital and Economic Growth Nexus in Pakistan: The Role of Foreign Aid

Author

Listed:
  • Hamid Ali

    (Department of Economics & Agri. Economics, PMAS Arid Agriculture University Rawalpindi, Pakistan)

  • Hafiz Muhammad Abubakar Siddique

    (Federal Urdu University Islamabad, Pakistan)

  • Kaleem Ullah

    (Federal Urdu University Islamabad, Pakistan)

  • Muhammad Tariq Mahmood

    (Federal Urdu University Islamabad, Pakistan)

Abstract

Human capital is one of the major factor that increase the level of output and accelerate the economic growth. The efficient human capital stock is mandatory for economic and human development. This paper examined the role of foreign aid in enhancing the quality of human capital in Pakistan for 1980-2016, using Johansen co-integration and granger causality approaches. The findings of Johansen co-integration express the long run nexus between human capital, foreign aid, economic growth, and human development index. The empirical results exposed one-way causality from human capital and economic growth to foreign aid, and the existence of two-way causal relationship among human capital and HDI.

Suggested Citation

  • Hamid Ali & Hafiz Muhammad Abubakar Siddique & Kaleem Ullah & Muhammad Tariq Mahmood, 2018. "Human Capital and Economic Growth Nexus in Pakistan: The Role of Foreign Aid," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 7(1), pages 13-21, March.
    • Handle: RePEc:rfh:bbejor:v:7:y:2018:i:1:p:13-21
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    References listed on IDEAS

    as
    1. Chani, Muhammad Irfan & Pervaiz, Zahid & Jan, Sajjad Ahmad & Ali, Amjad & Chaudhary, Amatul R., 2011. "Poverty, inflation and economic growth: empirical evidence from Pakistan," MPRA Paper 34290, University Library of Munich, Germany, revised 2011.
    2. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    3. Ali, Amjad & Ur Rehman, Hafeez, 2015. "Macroeconomic Instability and Its Impact on Gross Domestic Product: An Empirical Analysis of Pakistan," MPRA Paper 82496, University Library of Munich, Germany, revised 2015.
    4. Ahmad, Khalil & Ali , Amjad & Chani, Muhammd Irfan, 2014. "Does Foreign Aid to Social Sector Matter for Fertility Reduction? An Empirical Analysis for Pakistan," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 37(04), pages 65-76, December.
    5. Bloom, David E. & Canning, David & Sevilla, Jaypee, 2004. "The Effect of Health on Economic Growth: A Production Function Approach," World Development, Elsevier, vol. 32(1), pages 1-13, January.
    6. Peter J. Klenow & Mark Bils, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, vol. 90(5), pages 1160-1183, December.
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    Cited by:

    1. Tomiwa Sunday Adebayo & Demet Beton Kalmaz, 2020. "Ongoing Debate Between Foreign Aid and Economic Growth in Nigeria: A Wavelet Analysis," Social Science Quarterly, Southwestern Social Science Association, vol. 101(5), pages 2032-2051, September.
    2. Qasim Saleem & Sidra Sidra & Abdur Rauf & Hafiz Muhammad Abubakar Siddique, 2020. "Impact of Terrorism on Economic Growth in South Asian Country," International Journal of Economics and Financial Issues, Econjournals, vol. 10(4), pages 185-191.
    3. Iva Bulatoviæ & Ana Stranjanèeviæ & Silvana Ðuraševiæ & Sanja Vlahoviæ, 2018. "Determinants Of Tourist Competitiveness In The Case Of Montenegro: Experts’ Assessment," Tourism and Hospitality Management, University of Rijeka, Faculty of Tourism and Hospitality Management, vol. 24(2), pages 271-286, December.

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    More about this item

    Keywords

    Human Capital; Economic growth; Foreign Aid; Johansen co-integration test; Pakistan;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • F35 - International Economics - - International Finance - - - Foreign Aid

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