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The Farthest Needs the Best. Human Capital Composition and Development Specific Economic Growth

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  • Fabio Manca

Abstract

In this study we provide robust and compelling evidence of the larger effect of tertiary education on the growth of less developed countries and of the relatively smaller impact on the growth of developed ones. This argues for the accumulation of high skills especially in technologically under-developed countries and, contrary to the common wisdom, independently of the fact that these economies might be initially producing low(er)-technology goods or performing technology imitation. Our results are robust to the different measures used to proxy for human capital and to the adjustment for cross-country differences in the quality of education. Country-specific insitutional quality, as well as other various indicators such as the legal origin, the religious fractionalization and openness to trade have been used to control for the robustness of the results. They are also shown to speed up technology convergence confirming previous empirical literature. Our estimates tackle endogeneity by applying a variety of techniques such as IV (both panel and cross-section) and two-step efficient system GMM.

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  • Fabio Manca, 2011. "The Farthest Needs the Best. Human Capital Composition and Development Specific Economic Growth," DEGIT Conference Papers c016_048, DEGIT, Dynamics, Economic Growth, and International Trade.
  • Handle: RePEc:deg:conpap:c016_048
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    File URL: http://degit.sam.sdu.dk/papers/degit_16/c016_048.pdf
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    1. Michelle P. Connolly & Diego Valderrama, 2005. "North-South technological diffusion and dynamic gains from trade," Working Paper Series 2004-24, Federal Reserve Bank of San Francisco.
    2. Mansfield, Edwin & Schwartz, Mark & Wagner, Samuel, 1981. "Imitation Costs and Patents: An Empirical Study," Economic Journal, Royal Economic Society, vol. 91(364), pages 907-918, December.
    3. Benhabib, Jess & Spiegel, Mark M., 2005. "Human Capital and Technology Diffusion," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 13, pages 935-966 Elsevier.
    4. Philippe Aghion & Christopher Harris & Peter Howitt & John Vickers, 2001. "Competition, Imitation and Growth with Step-by-Step Innovation," Review of Economic Studies, Oxford University Press, vol. 68(3), pages 467-492.
    5. Daron Acemoglu & Philippe Aghion & Fabrizio Zilibotti, 2006. "Distance to Frontier, Selection, and Economic Growth," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 37-74, March.
    6. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
    7. Manca, Fabio, 2010. "Technology catch-up and the role of institutions," Journal of Macroeconomics, Elsevier, vol. 32(4), pages 1041-1053, December.
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    Cited by:

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    13. Germà Bel & Xavier Fageda & Melania Mur, 2011. "Why do municipalities cooperate to provide local public services? An empirical analysis," IREA Working Papers 201118, University of Barcelona, Research Institute of Applied Economics, revised Oct 2011.
    14. Jordi López-Tamayo & Vicente Royuela & Jordi Suriñach, 2012. "“Building a “quality in work” index in Spain”," IREA Working Papers 201206, University of Barcelona, Research Institute of Applied Economics, revised Feb 2012.
    15. Xavier Fageda & Marta Gonzalez-Aregall, 2012. "“Regulation of Port Charges in Spain: Global versus Local Competition”," IREA Working Papers 201217, University of Barcelona, Research Institute of Applied Economics, revised Oct 2012.

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