Research Article
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Year 2020, , 338 - 345, 31.12.2020
https://doi.org/10.17261/Pressacademia.2020.1307

Abstract

References

  • Acemoglu, D. and Johnson, S. (2014). Disease and development: A reply to Bloom, Canning, and Fink. Journal of Political Economy, 122(6),1367–1375. https://doi.org/10.1086/677190
  • Adeyemi, P. A. and Ogunsola, J. A. (2016). The impact of human capital development on economic growth in Nigeria: ARDL approach. Journal Of Humanities and Social Science , 21(3), 1-7. DOI: 10.9790/0837-2103040107.
  • Agarwal, P. (2006). Higher Education in India. Indian Council for Research on International Economic Relations, Working Paper No. 180. http://www.icrier.org/pdf/ICRIER_WP180__Higher_Education_in_India_.pdf
  • Appiah, M., Amoasi, R. and Frowne, D. I. (2019). Human Development and Its Effects on Economic Growth and Development. International Research Journal of Business Studies, XII(02), 101 – 109. https://doi.org/10.21632/irjbs.
  • Aksentijević, N.K. and Ježić, Z. (2017). Measuring the development of human resources with the usage of Human Development Index in selected CEE countries. In Wach, K., Knežević, B., & Šimurina, N. (Eds.), Challenges for international business in Central and Eastern Europe (Przedsiębiorczość Międzynarodowa” vol. 3(1). Kraków: Cracow University of Economics, pp. 109-121.
  • Andres, J. and Hernando, I. (1997). Inflation and economic growth: some evidence for the OECD countries. Monetary Policy and the Inflation Process - BIS Conference Papers, n4, pp. 364-383.
  • Arcelus, F. J., Sharma, B. and Srinivasan, G. (2005). Foreign capital flows and the efficiency of the HDI dimensions. Global Economy Journal, 5(2), 1-12.
  • Balcı, E. and Özcan, S. (2019). İnsani gelişmişlik ve büyüme arasındaki ilişki: OIC ülkeleri üzerinde bir analiz. Sakarya İktisat Dergisi, Cilt 8(3), ss. 222-235.
  • Barro, R.J. (2013). Inflation and economic growth. Annals of Economics and Finance. Vol. 14, pp. 121-144. http://down.aefweb.net/AefArticles/aef140106Barro.pdf
  • Basu, P. and Guariglia, A. (2007). Foreign direct investment, inequality, and growth. Journal of Macroeconomics, 29(4), 824–839.
  • Bjørnstad, R. and Skjerpen, T. (2006). Trade and inequality in wages and unemployment. Economic modelling, 23(1), 20–44.
  • Blomstrom, M., Lipsey, R. E. and Zejan, M. (1996). Is fixed investment the key to economic growth? The Quarterly Journal of Economics, Vol. 111, No. 1., pp. 269-276. Retrieved November 5, 2020, from http://www.jstor.org/stable/2946665
  • George, Emmanuel O. and Ogunyomi, O. O. (2019). Is there any Missing Link in the Nexus between Human Capital Development and Economic Growth in Developing Economies? Evidence from Nigeria. Acta Universitatis Danubius, Vol.15(1), pp. 117-133. ISSN: 2065-0175.
  • Ghosh, M. (2006). Economic Growth and Human Development in Indian States. Economic and Political Weekly, Vol.41(30). https://www.epw.in/journal/2006/30/special-articles/economic-growth-and-human-development-indian-states.html
  • Gokal, V. and Hanif, S. (2004). Relationship Between Inflation and Economic Growth. Economic Department Reserve Bank of Fiji Working Paper No.4. https://www.rbf.gov.fj/relationship-between-inflation-and-economic-growth-by-vikesh-gokal-subrina-hanif-economics-group-december-2004/
  • Hall, B. H. and Mairesse, J. (2005). Testing for Unit Roots in Panel Data: An Exploration Using Real and Simulated Data. In D. Andrews & J. Stock (Eds.), Identification and Inference for Econometric Models: Essays in Honor of Thomas Rothenberg (pp. 451-479). Cambridge: Cambridge University Press. doi:10.1017/CBO9780511614491.020.
  • Herman, E. (2011). The impact of economic growth process on employment in European Union countries. 14(42), 47-67.
  • Hicks, D.A. (1997). The Inequality-Adjusted Human Development Index: A Constructive Proposal. World Development, Vol. 25, No. 8, pp. 1283-1298. http://hdr.undp.org/en/countries/profiles/TUR
  • Howitt, P. and Aghion, P. (1998). Capital Accumulation and Innovation as Complementary Factors in Long-Run Growth. Journal of Economic Growth, 3, 111–130. https://doi.org/10.1023/A:1009769717601
  • Isola, Wakeel A. and Alani, R. A. (2012). Human Capital Development and Economic Growth: Empirical Evidence from Nigeria. Asian Economic and Financial Review,2(7), 813-827.https://EconPapers.repec.org/RePEc:asi:aeafrj:2012:p:813-827
  • Kendrick, J. W. (1993). How much does capital explain? .Contributions to economic analysis, 214, pp.129.
  • Khan, A. R. (2007). Growth, employment and poverty: An analysis of the vital nexus based on some recent UNDP and ILO/ SIDA studies. DESA Working Paper No. 49, 1-45. https://www.un.org/esa/desa/papers/2007/wp49_2007.pdf
  • Levine, R. and Renelt, D. (1992). A Sensitivity Analysis of Cross-Country Growth Regressions. The American Economic Review, 82(4), 942-963. Retrieved November 5, 2020, from http://www.jstor.org/stable/2117352
  • Manh, P. H., Dao, H. T. T. and Van Ngoc, N. J. J. o. E. D. (2014). Relationship between economic growth and employment in Vietnam. JED, No. 222, 40-50.
  • Mihaela, N.D. and Georgiana, C.O. (2015). Correlations between human development and economic growth. Annals of the Constantin Brâncuşi University of Târgu Jiu Economy Series, Issue 1(1), 118-122.http://www.utgjiu.ro/revista/ec/pdf/2015-01.Volumul%201/16_Neamtu,%20Ciobanu.pdf
  • Pedroni, P. (2000). Fully modified OLS for heterogeneous cointegrated panels in Nonstationary Panels. Panel Cointegration and Dynamic Panels, H. B. Baltagi, (Ed.), vol. 15 of Advances in Econometrics, pp. 93–130
  • Pedroni, P. (2001). Purchasing power parity tests in cointegrated panels. Review of Economics and Statistics, vol. 83, no. 4, pp. 727–731.
  • Pesaran, M. Hashem, (2011). On the Interpretation of Panel Unit Root Tests. http://www.econ.cam.ac.uk/people-files/emeritus/mhp1/wp11/Interpretation-Panel-Unit-September-2011. pdf ,1-6.
  • Pollin, R. and Zhu, A. (2006). Inflation and Economic Growth: A Cross-Country Nonlinear Analysis. Journal of Post Keynesian Economics, 28, 593-614. http://dx.doi.org/10.2753/PKE0160-3477280404
  • Ranis, Gustav (2004). Human Development and Economic Growth. Center Discussion Paper No.887, Economic Growth Center, Yale University, 1-15. http://www.econ.yale.edu/~egcenter/research.htm
  • Reyes, G.E. and Useche, A.J. (2019). Competitiveness, economic growth and human development in Latin American and Caribbean countries 2006-2015: A performance and correlation analysis. Competitiveness Review, Vol. 29 No. 2, pp. 139-159. https://doi.org/10.1108/CR-11-2017-0085.
  • Saksena, S. and Deb, M. (2016). Transition pattern of Indian states across different categories of growth and development: Post economic liberalisation experience. Business and Economic Horizons, Vol.12, Issue3, pp.121-140. DOI: http://dx.doi.org/10.15208/beh.2016.10
  • Singh, A. (2012). Financial globalization and human development. Journal of Human Development and Capabilities, 13(1), 135–151.
  • Tsaurai, K. (2018). Is Human Capital Development a Channel Through Which Financial Development Influences Economic Growth? A Case of Emerging Markets. Euroeconomica, Issue 3(37), 130-139. ISSN: 1582-8859. http://hdr.undp.org/en/content/2019-human-development-index-ranking
  • http://hdr.undp.org/en/content/human-development-index-hdi
  • http://hdr.undp.org/sites/default/files/hdr2015_technical_notes.pdf

EFFECT OF HUMAN DEVELOPMENT INDEX ON GDP FOR DEVELOPING COUNTRIES: A PANEL DATA ANALYSIS

Year 2020, , 338 - 345, 31.12.2020
https://doi.org/10.17261/Pressacademia.2020.1307

Abstract

Purpose - The main purpose of this study is to test the effect of human and physical capital on GDP. The study aims to realize this by means of using gross fixed capital formation as physical capital indicator and education expenditures, life expectancy at birth as human capital indicators by analyzing the data of the 16 developing countries
Methodology – This study aims to determine the long-run impact of physical and human capital on GDP by using the panel data set of 16 developing countries over the period 1990–2018. In the established model, growth (GDP) is the dependent variable, Human Development Index (HDI), Inflation (INF), Government Capital, ODA proxied as official development assistant, Investment (INV) proxied as foreign direct investment and Labour (LAB) as independent and control variables are included. Random and Fixed effects estimation techniques are employed to analyse and assess the significance relationship between economic growth and human development index.
Findings- According to test results, human development supports economic growth. It can be noticed that inflation is significant and have a negative relationship with economic growth and development for our sample and period. It can be recorded that Labour (LAB) has a significant and is positively related to economic growth. Goverment capital (GC) is seen to be positively related to growth (GDP) and also significant.
Conclusion- The key findings and results of the study suggested the existence of a positive and significant impact of human development on economic growth and development in developing countries. The study employed Human Development Index as the main variable of interest with GDP considered as the dependent variable with inflation, gross capital, foreign direct investment and labour as control variables. The study also came out with the findings that labour also have a positive and significant relationship with growth as recorded by most researchers. More governmental efforts should be placed on the development of the human capital. For the area of life expectancy, governments should provide good and better health care policies and facilities, health insurance for every citizen.

References

  • Acemoglu, D. and Johnson, S. (2014). Disease and development: A reply to Bloom, Canning, and Fink. Journal of Political Economy, 122(6),1367–1375. https://doi.org/10.1086/677190
  • Adeyemi, P. A. and Ogunsola, J. A. (2016). The impact of human capital development on economic growth in Nigeria: ARDL approach. Journal Of Humanities and Social Science , 21(3), 1-7. DOI: 10.9790/0837-2103040107.
  • Agarwal, P. (2006). Higher Education in India. Indian Council for Research on International Economic Relations, Working Paper No. 180. http://www.icrier.org/pdf/ICRIER_WP180__Higher_Education_in_India_.pdf
  • Appiah, M., Amoasi, R. and Frowne, D. I. (2019). Human Development and Its Effects on Economic Growth and Development. International Research Journal of Business Studies, XII(02), 101 – 109. https://doi.org/10.21632/irjbs.
  • Aksentijević, N.K. and Ježić, Z. (2017). Measuring the development of human resources with the usage of Human Development Index in selected CEE countries. In Wach, K., Knežević, B., & Šimurina, N. (Eds.), Challenges for international business in Central and Eastern Europe (Przedsiębiorczość Międzynarodowa” vol. 3(1). Kraków: Cracow University of Economics, pp. 109-121.
  • Andres, J. and Hernando, I. (1997). Inflation and economic growth: some evidence for the OECD countries. Monetary Policy and the Inflation Process - BIS Conference Papers, n4, pp. 364-383.
  • Arcelus, F. J., Sharma, B. and Srinivasan, G. (2005). Foreign capital flows and the efficiency of the HDI dimensions. Global Economy Journal, 5(2), 1-12.
  • Balcı, E. and Özcan, S. (2019). İnsani gelişmişlik ve büyüme arasındaki ilişki: OIC ülkeleri üzerinde bir analiz. Sakarya İktisat Dergisi, Cilt 8(3), ss. 222-235.
  • Barro, R.J. (2013). Inflation and economic growth. Annals of Economics and Finance. Vol. 14, pp. 121-144. http://down.aefweb.net/AefArticles/aef140106Barro.pdf
  • Basu, P. and Guariglia, A. (2007). Foreign direct investment, inequality, and growth. Journal of Macroeconomics, 29(4), 824–839.
  • Bjørnstad, R. and Skjerpen, T. (2006). Trade and inequality in wages and unemployment. Economic modelling, 23(1), 20–44.
  • Blomstrom, M., Lipsey, R. E. and Zejan, M. (1996). Is fixed investment the key to economic growth? The Quarterly Journal of Economics, Vol. 111, No. 1., pp. 269-276. Retrieved November 5, 2020, from http://www.jstor.org/stable/2946665
  • George, Emmanuel O. and Ogunyomi, O. O. (2019). Is there any Missing Link in the Nexus between Human Capital Development and Economic Growth in Developing Economies? Evidence from Nigeria. Acta Universitatis Danubius, Vol.15(1), pp. 117-133. ISSN: 2065-0175.
  • Ghosh, M. (2006). Economic Growth and Human Development in Indian States. Economic and Political Weekly, Vol.41(30). https://www.epw.in/journal/2006/30/special-articles/economic-growth-and-human-development-indian-states.html
  • Gokal, V. and Hanif, S. (2004). Relationship Between Inflation and Economic Growth. Economic Department Reserve Bank of Fiji Working Paper No.4. https://www.rbf.gov.fj/relationship-between-inflation-and-economic-growth-by-vikesh-gokal-subrina-hanif-economics-group-december-2004/
  • Hall, B. H. and Mairesse, J. (2005). Testing for Unit Roots in Panel Data: An Exploration Using Real and Simulated Data. In D. Andrews & J. Stock (Eds.), Identification and Inference for Econometric Models: Essays in Honor of Thomas Rothenberg (pp. 451-479). Cambridge: Cambridge University Press. doi:10.1017/CBO9780511614491.020.
  • Herman, E. (2011). The impact of economic growth process on employment in European Union countries. 14(42), 47-67.
  • Hicks, D.A. (1997). The Inequality-Adjusted Human Development Index: A Constructive Proposal. World Development, Vol. 25, No. 8, pp. 1283-1298. http://hdr.undp.org/en/countries/profiles/TUR
  • Howitt, P. and Aghion, P. (1998). Capital Accumulation and Innovation as Complementary Factors in Long-Run Growth. Journal of Economic Growth, 3, 111–130. https://doi.org/10.1023/A:1009769717601
  • Isola, Wakeel A. and Alani, R. A. (2012). Human Capital Development and Economic Growth: Empirical Evidence from Nigeria. Asian Economic and Financial Review,2(7), 813-827.https://EconPapers.repec.org/RePEc:asi:aeafrj:2012:p:813-827
  • Kendrick, J. W. (1993). How much does capital explain? .Contributions to economic analysis, 214, pp.129.
  • Khan, A. R. (2007). Growth, employment and poverty: An analysis of the vital nexus based on some recent UNDP and ILO/ SIDA studies. DESA Working Paper No. 49, 1-45. https://www.un.org/esa/desa/papers/2007/wp49_2007.pdf
  • Levine, R. and Renelt, D. (1992). A Sensitivity Analysis of Cross-Country Growth Regressions. The American Economic Review, 82(4), 942-963. Retrieved November 5, 2020, from http://www.jstor.org/stable/2117352
  • Manh, P. H., Dao, H. T. T. and Van Ngoc, N. J. J. o. E. D. (2014). Relationship between economic growth and employment in Vietnam. JED, No. 222, 40-50.
  • Mihaela, N.D. and Georgiana, C.O. (2015). Correlations between human development and economic growth. Annals of the Constantin Brâncuşi University of Târgu Jiu Economy Series, Issue 1(1), 118-122.http://www.utgjiu.ro/revista/ec/pdf/2015-01.Volumul%201/16_Neamtu,%20Ciobanu.pdf
  • Pedroni, P. (2000). Fully modified OLS for heterogeneous cointegrated panels in Nonstationary Panels. Panel Cointegration and Dynamic Panels, H. B. Baltagi, (Ed.), vol. 15 of Advances in Econometrics, pp. 93–130
  • Pedroni, P. (2001). Purchasing power parity tests in cointegrated panels. Review of Economics and Statistics, vol. 83, no. 4, pp. 727–731.
  • Pesaran, M. Hashem, (2011). On the Interpretation of Panel Unit Root Tests. http://www.econ.cam.ac.uk/people-files/emeritus/mhp1/wp11/Interpretation-Panel-Unit-September-2011. pdf ,1-6.
  • Pollin, R. and Zhu, A. (2006). Inflation and Economic Growth: A Cross-Country Nonlinear Analysis. Journal of Post Keynesian Economics, 28, 593-614. http://dx.doi.org/10.2753/PKE0160-3477280404
  • Ranis, Gustav (2004). Human Development and Economic Growth. Center Discussion Paper No.887, Economic Growth Center, Yale University, 1-15. http://www.econ.yale.edu/~egcenter/research.htm
  • Reyes, G.E. and Useche, A.J. (2019). Competitiveness, economic growth and human development in Latin American and Caribbean countries 2006-2015: A performance and correlation analysis. Competitiveness Review, Vol. 29 No. 2, pp. 139-159. https://doi.org/10.1108/CR-11-2017-0085.
  • Saksena, S. and Deb, M. (2016). Transition pattern of Indian states across different categories of growth and development: Post economic liberalisation experience. Business and Economic Horizons, Vol.12, Issue3, pp.121-140. DOI: http://dx.doi.org/10.15208/beh.2016.10
  • Singh, A. (2012). Financial globalization and human development. Journal of Human Development and Capabilities, 13(1), 135–151.
  • Tsaurai, K. (2018). Is Human Capital Development a Channel Through Which Financial Development Influences Economic Growth? A Case of Emerging Markets. Euroeconomica, Issue 3(37), 130-139. ISSN: 1582-8859. http://hdr.undp.org/en/content/2019-human-development-index-ranking
  • http://hdr.undp.org/en/content/human-development-index-hdi
  • http://hdr.undp.org/sites/default/files/hdr2015_technical_notes.pdf
There are 36 citations in total.

Details

Primary Language English
Subjects Economics, Finance, Business Administration
Journal Section Articles
Authors

Tuba Gulcemal This is me 0000-0003-4806-8568

Publication Date December 31, 2020
Published in Issue Year 2020

Cite

APA Gulcemal, T. (2020). EFFECT OF HUMAN DEVELOPMENT INDEX ON GDP FOR DEVELOPING COUNTRIES: A PANEL DATA ANALYSIS. Journal of Economics Finance and Accounting, 7(4), 338-345. https://doi.org/10.17261/Pressacademia.2020.1307

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