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The impact of human capital and defense expenditures on economic growth: Panel analysis for selected SSA countries.

Year 2021, Volume: 5 Issue: 1, 14 - 26, 07.04.2021

Abstract

The purpose of this study is to investigate the existence of heterogeneity in the effect of human capital and defense expenditures on the economic growth of sub-Saharan African countries based on evidence from eight of these countries for the period 2014-2017. The panel fixed effect and the Least Square Dummy Variable (LSDV) version of the fixed effect models are employed. The findings reveal that, while education and defense expenditures have a positive and statistically significant impact on the economic growth of the various countries, the effect of health expenditure on economic growth is positive and insignificant. Further, some significant level of heterogeneity is found in the manner human capital and defense expenditures impact economic growth in the various countries, and this is attributed to varying weights the different countries place on the need for their human capital development. Appropriate policy recommendations are made based on these findings.

Supporting Institution

This research is not an institution supported work.

References

  • Basuki, A. T., Purwaningsih, Y., Mulyanto, & Susilo, A. M. (2019). The role of local government expenditure on economic growth: A review of panel data in Indonesia. Humanities and Social Sciences Reviews, 7(5), 1293–1303. https://doi.org/10.18510/hssr.2019.75168
  • Bedir, S. (2016). Healthcare Expenditure and Economic Growth in Developing Countries. Advances in Economics and Business, 4(2), 76–86. https://doi.org/10.13189/aeb.2016.040202
  • Botha, D. J. (1963). The Critics of Keynesian Economics (Review Article)1. South African Journal of Economics, 31(2), 81–102. https://doi.org/https://doi.org/10.1111/j.1813-6982.1963.tb02952.x
  • Dincer, H., & Yüksel, S. (2019). Journal of Health Systems and Policies. Journal of Health System and Policies, 1, 5–23.
  • Gatsi, J. G., Appiah, M. O., & Gyan, J. A. (2019). A test of Wagner’s hypothesis for the Ghanaian economy. Cogent Business and Management, 6(1). https://doi.org/10.1080/23311975.2019.1647773
  • Gemmell, N., Kneller, R., & Sanz, I. (2016). Does the Composition of Government Expenditure Matter for Long-Run GDP Levels? Oxford Bulletin of Economics and Statistics, 78(4), 522–547. https://doi.org/10.1111/obes.12121
  • Giesselman, M., & Catran, A. S. (2018). Interactions in Fixed Eff ects Regression Models. German Institute for Economic Research.
  • Hakeem, M. I. (2010). Banking development, human capital and economic growth in Sub‐Saharan Africa (SSA). Journal of Economic Studies, 37(5), 557–577. https://doi.org/10.1108/01443581011075479
  • Kesavarajah, M. (2012). Wagner’s Law in Sri Lanka: An Econometric Analysis. ISRN Economics, 2012, 1–8. https://doi.org/10.5402/2012/573826
  • Keynes, J. M. (1936). The General Theory of Employment, Interest and Money. In Modern Economic Classics-Evaluations Through Time. https://doi.org/10.4324/9781315270548-13
  • Mallick, L., Das, P. K., & Pradhan., K. C. (2016). Impact of educational expenditure on economic growth in major Asian countries: Evidence from econometric analysis. Theoretical and Applied Economics, XXIII(2), 173–186.
  • Mose, N., Kibet, L., Aquilars, K., James, B., & Symon, K. (2014). Effect of Government Expenditure on Economic Growth in East Africa : Panel Data Analysis. Journal Of International Academic Research For Multidisciplinary, 2(4), 428–442.
  • Phiri, A. (2016). Does military spending nonlinearly affect economic growth in South Africa ? Munich Personal RePEc Archive, 69730.
  • Sirag, A., Nor, N. M., Abdullah, N. M. R., & Karimi, M. (2016). Does high public health expenditure slow down economic growth? Journal of Applied Economic Sciences, 11(1).
  • Tapuwa, K., Ncwadı, R., & Phiri, A. (2018). Department of Economic Working Papers Series. 1–17.

The Impact of Human Capital and Defense Expenditures on Economic Growth: Panel Analysis for Selected SSA Countries

Year 2021, Volume: 5 Issue: 1, 14 - 26, 07.04.2021

Abstract

Bu çalışmanın amacı, beşeri sermaye ve savunma harcamalarının Sahra altı Afrika ülkelerinin ekonomik büyümesi üzerindeki etkisindeki heterojenliğin varlığını, 2014-2017 dönemi için bu ülkelerden sekizinin kanıtlarına dayanarak araştırmaktadır. Panel sabit efekt ve en küçük kare Kukla değişkeni (LSDV) versiyonu olan sabit efekt kullanılmaktadır. Bulgular, eğitim ve savunma harcamalarının çeşitli ülkelerin ekonomik büyümesi üzerinde olumlu ve istatistiksel olarak anlamlı bir etkiye sahip olmasına rağmen, sağlık harcamalarının ekonomik büyüme üzerindeki etkisinin olumlu ve önemsiz olduğunu göstermektedir. Buna ek olarak, insan sermayesi ve savunma harcamalarının çeşitli ülkelerdeki ekonomik büyümeyi nasıl etkilediği konusunda önemli bir heterojenlik seviyesi vardır ve bu, farklı ülkelerin insan sermayesini geliştirme ihtiyacına farklı ağırlıklar koymasından kaynaklanmaktadır. Bu bulgulara dayanarak uygun politika önerileri yapılmaktadır.

References

  • Basuki, A. T., Purwaningsih, Y., Mulyanto, & Susilo, A. M. (2019). The role of local government expenditure on economic growth: A review of panel data in Indonesia. Humanities and Social Sciences Reviews, 7(5), 1293–1303. https://doi.org/10.18510/hssr.2019.75168
  • Bedir, S. (2016). Healthcare Expenditure and Economic Growth in Developing Countries. Advances in Economics and Business, 4(2), 76–86. https://doi.org/10.13189/aeb.2016.040202
  • Botha, D. J. (1963). The Critics of Keynesian Economics (Review Article)1. South African Journal of Economics, 31(2), 81–102. https://doi.org/https://doi.org/10.1111/j.1813-6982.1963.tb02952.x
  • Dincer, H., & Yüksel, S. (2019). Journal of Health Systems and Policies. Journal of Health System and Policies, 1, 5–23.
  • Gatsi, J. G., Appiah, M. O., & Gyan, J. A. (2019). A test of Wagner’s hypothesis for the Ghanaian economy. Cogent Business and Management, 6(1). https://doi.org/10.1080/23311975.2019.1647773
  • Gemmell, N., Kneller, R., & Sanz, I. (2016). Does the Composition of Government Expenditure Matter for Long-Run GDP Levels? Oxford Bulletin of Economics and Statistics, 78(4), 522–547. https://doi.org/10.1111/obes.12121
  • Giesselman, M., & Catran, A. S. (2018). Interactions in Fixed Eff ects Regression Models. German Institute for Economic Research.
  • Hakeem, M. I. (2010). Banking development, human capital and economic growth in Sub‐Saharan Africa (SSA). Journal of Economic Studies, 37(5), 557–577. https://doi.org/10.1108/01443581011075479
  • Kesavarajah, M. (2012). Wagner’s Law in Sri Lanka: An Econometric Analysis. ISRN Economics, 2012, 1–8. https://doi.org/10.5402/2012/573826
  • Keynes, J. M. (1936). The General Theory of Employment, Interest and Money. In Modern Economic Classics-Evaluations Through Time. https://doi.org/10.4324/9781315270548-13
  • Mallick, L., Das, P. K., & Pradhan., K. C. (2016). Impact of educational expenditure on economic growth in major Asian countries: Evidence from econometric analysis. Theoretical and Applied Economics, XXIII(2), 173–186.
  • Mose, N., Kibet, L., Aquilars, K., James, B., & Symon, K. (2014). Effect of Government Expenditure on Economic Growth in East Africa : Panel Data Analysis. Journal Of International Academic Research For Multidisciplinary, 2(4), 428–442.
  • Phiri, A. (2016). Does military spending nonlinearly affect economic growth in South Africa ? Munich Personal RePEc Archive, 69730.
  • Sirag, A., Nor, N. M., Abdullah, N. M. R., & Karimi, M. (2016). Does high public health expenditure slow down economic growth? Journal of Applied Economic Sciences, 11(1).
  • Tapuwa, K., Ncwadı, R., & Phiri, A. (2018). Department of Economic Working Papers Series. 1–17.
There are 15 citations in total.

Details

Primary Language English
Subjects Economics
Journal Section Articles
Authors

Adamu Braimah Abille 0000-0001-6623-1408

Wilkista Lore Obıero 0000-0002-0498-3142

Publication Date April 7, 2021
Published in Issue Year 2021 Volume: 5 Issue: 1

Cite

APA Abille, A. B., & Obıero, W. L. (2021). The impact of human capital and defense expenditures on economic growth: Panel analysis for selected SSA countries. Anadolu İktisat Ve İşletme Dergisi, 5(1), 14-26.