THE LONG-RUN RELATIONSHIP BETWEEN HUMAN CAPITAL AND CURRENT ACCOUNT BALANCES

Öz

This study aims to find out the long-run relationship between human capital and the current account balances. The panel data analysis is carried out for the time period between 1990 and 2018. 88 developing and developed countries are included in the study. Panel cointegration analysis is applied to test the long-run relationships. The human capital is represented by two indexes. First one is The Institute for Health Metrics and Evaluation (IHME) human capital index. Second one is United Nations human development Index. For both indexes, there are significant and positive long-run relationships between the human capitals with current account balances for high income countries. And there are negative long-run statistically significant relationships for all countries, all countries except industrial countries and all countries except industrial and African countries groups.

Anahtar Kelimeler

• current account balances
• human capital
• panel data analysis
• panel cointegration analysis

THE LONG-RUN RELATIONSHIP BETWEEN HUMAN CAPITAL AND CURRENT ACCOUNT BALANCES

Öz

Bu çalışmada beşeri sermaye ile cari işlemler dengesi arasında uzun dönemli ilişkinin varlığı araştırılmıştır. Panel veri analizi 88 gelişmiş ve gelişmekte olan ülke için 1990 ve 2018 yılları için uygulanmıştır. Uzun dömenli ilişkiyi araştırmak için panel eşbütünleşme analizi kullanılmıştır. Beşeri sermaye iki ayrı indeksle temsil edilmiştir. Birincisi Sağlık Ölçüm ve Değerlendirme Enstitüsü’nün beşeri sermaye indeksidir. İkincisi, Birleşmiş Milletler’in insani gelişim indeksidir. İki indeks için de, yüksek gelirli ülkeler grubunda beşeri sermaye ile cari işlemler dengesi arasında pozitif, anlamlı ve uzun dönemli bir ilişki olduğu sonucuna ulaşılmıştır. Sanayileşmiş ülkeler hariç tüm ülkeler, Afrika ve sanayileşmiş ülkeler hariç tüm ülkeler ve tüm ülkeler grubu için ise negatif, anlamlı ve uzun dönemli bir ilişkinin olduğu tespit edilmiştir.

Anahtar Kelimeler

• cari işlemler dengesi
• beşeri sermaye
• panel veri analizi
• panel eşbütünleşme analizi

Kaynakça

1. Alfaro, L., Ozcan, S. K. and Volosovych V. (2008). Why doesn’t Capital Flow from Rich to Poor Countries? An Empirical Investigation. The Review of Economics and Statistics, 90 (2): 347–368.
2. Alfaro, L., Ozcan, S. K. and Volosovych V. (2008). Why doesn’t Capital Flow from Rich to Poor Countries? An Empirical Investigation. The Review of Economics and Statistics, 90 (2): 347–368.
3. Altayligil, Y.B. and Çetrez, M. (2020). Macroeconomic, institutional and financial determinants of current account balances: a panel data assessment. The Journal of Economic Structures, 9, 49.
4. Altayligil, Y.B. and Çetrez, M. (2020). Macroeconomic, institutional and financial determinants of current account balances: a panel data assessment. The Journal of Economic Structures, 9, 49.
5. Aristovnik, A. (2006). The Determinants and Excessiveness of Current Account Deficits in Eastern Europe and the Former Soviet Union. William Davidson Institute, 827.
6. Aristovnik, A. (2006). The Determinants and Excessiveness of Current Account Deficits in Eastern Europe and the Former Soviet Union. William Davidson Institute, 827.
7. Benhabib, J. and Spiegel M. M. (1994). The role of human capital in economic development evidence from aggregate cross-country data. Journal of Monetary Economics, Volume 34, Issue 2, Pages 143-173.
8. Benhabib, J. and Spiegel M. M. (1994). The role of human capital in economic development evidence from aggregate cross-country data. Journal of Monetary Economics, Volume 34, Issue 2, Pages 143-173.

9. Bernanke, B. (2005), The Global Saving Glut and the U.S. Current Account Deficit, Remarks by Governor Ben S. Bernanke, at the Homer Jones Lecture, St. Louis, Missouri.
10. Bernanke, B. (2005), The Global Saving Glut and the U.S. Current Account Deficit, Remarks by Governor Ben S. Bernanke, at the Homer Jones Lecture, St. Louis, Missouri.
11. Blundell R., Dearden L., Meghir C. and Sianeso B. (1999). Human Capital Investment: The Returns from Education and Training to the Individual, The Firm and The Economy, Fiscal Studies. vol. 20, no. 1, pp. 1-23.
12. Blundell R., Dearden L., Meghir C. and Sianeso B. (1999). Human Capital Investment: The Returns from Education and Training to the Individual, The Firm and The Economy, Fiscal Studies. vol. 20, no. 1, pp. 1-23.
13. Calderon, C., Chong, A. and Loayza N. (2002). Determination of Current Account Deficits in Developing Countries. World Bank Policy Research Working Paper, No. 2398. Cheung, C., Furceri D. and Rustecelli E. (2013). Structural and Cyclical Factors behind Current Account Balances. Review of International Economics, 21: 923-944.
14. Calderon, C., Chong, A. and Loayza N. (2002). Determination of Current Account Deficits in Developing Countries. World Bank Policy Research Working Paper, No. 2398. Cheung, C., Furceri D. and Rustecelli E. (2013). Structural and Cyclical Factors behind Current Account Balances. Review of International Economics, 21: 923-944.
15. Chinn, M. and Prasad E. (2003). Medium-term determinants of current accounts in industrial and developing countries: an empirical exploration. Journal of International Economics, 59: 47–76.
16. Chinn, M. and Prasad E. (2003). Medium-term determinants of current accounts in industrial and developing countries: an empirical exploration. Journal of International Economics, 59: 47–76.
17. Chinn M., Eichengreen B. and Ito H. (2014). A forensic analysis of global imbalances. Oxford Economic Papers, Volume 66, Issue 2, Pages 465–490.
18. Chinn M., Eichengreen B. and Ito H. (2014). A forensic analysis of global imbalances. Oxford Economic Papers, Volume 66, Issue 2, Pages 465–490.
19. Chinn, M. and Ito, H. (2007). Current Account Balances, Financial Development and Institutions: Assaying the World Saving Glut. Journal of International Money and Finance, Elsevier, vol. 26(4), p. 546-569.
20. Chinn, M. and Ito, H. (2007). Current Account Balances, Financial Development and Institutions: Assaying the World Saving Glut. Journal of International Money and Finance, Elsevier, vol. 26(4), p. 546-569.
21. Cleeve, E. A., Debrah Y. and Yiheyis, Z. (2015). Human Capital and FDI Inflow: An Assessment of the African Case. World Development, Volume 74, Pages 1-14.
22. Cleeve, E. A., Debrah Y. and Yiheyis, Z. (2015). Human Capital and FDI Inflow: An Assessment of the African Case. World Development, Volume 74, Pages 1-14.
23. Das, D. K. (2016). Determinants of current account imbalance in the global economy: a dynamic panel analysis. The Journal of Economic Structures, 5, 8.
24. Das, D. K. (2016). Determinants of current account imbalance in the global economy: a dynamic panel analysis. The Journal of Economic Structures, 5, 8.
25. Debelle, G. and Faruqee, H. (1996). What determines the Current Account?. IMF Research Department, WP/96/58.
26. Debelle, G. and Faruqee, H. (1996). What determines the Current Account?. IMF Research Department, WP/96/58.
27. De La Fuenta, A. and Domenech, R. (2006). Human capital in growth regressions: how much difference does data quality make?. J. Eur. Econ. Assoc. 4 (1), 1–36.
28. De La Fuenta, A. and Domenech, R. (2006). Human capital in growth regressions: how much difference does data quality make?. J. Eur. Econ. Assoc. 4 (1), 1–36.
29. Dunning, J. H. (1977). Trade, location of economic activity and the MNE: a search for an eclectic approach, in Bertil Ohlin, Per-Ove Hesselborn and Per Magnus Wijkman, eds., The International Allocation of Economic Activity. London: Macmillan, 395-418.
30. Dunning, J. H. (1977). Trade, location of economic activity and the MNE: a search for an eclectic approach, in Bertil Ohlin, Per-Ove Hesselborn and Per Magnus Wijkman, eds., The International Allocation of Economic Activity. London: Macmillan, 395-418.
31. Dunning, J. H. (1988). The eclectic paradigm of international production: a restatement and some possible extensions. Journal of International Business Studies, 19(1): 1-31.
32. Dunning, J. H. (1988). The eclectic paradigm of international production: a restatement and some possible extensions. Journal of International Business Studies, 19(1): 1-31.
33. Freund, C. L. (2000). Current Account Adjustment in Industrialized Countries. Board of Governors of the Federal Reserve System International Finance Discussion Papers, Number 692.
34. Freund, C. L. (2000). Current Account Adjustment in Industrialized Countries. Board of Governors of the Federal Reserve System International Finance Discussion Papers, Number 692.
35. Gengenbach, C., Urbain, J. and Westerlund J. (2016). Error correction testing in panels with common sthocastic trends. Journal of Applied Econometrics, 31: 982-1004.
36. Gengenbach, C., Urbain, J. and Westerlund J. (2016). Error correction testing in panels with common sthocastic trends. Journal of Applied Econometrics, 31: 982-1004.
37. Gruber, J. and Kamin S. (2005). Explaining the Global Pattern of Current Account Imbalances. Board of Governors of the Federal Reserve System International Finance Discussion Papers, Number 846.
38. Gruber, J. and Kamin S. (2005). Explaining the Global Pattern of Current Account Imbalances. Board of Governors of the Federal Reserve System International Finance Discussion Papers, Number 846.
39. Gruber, J. and Kamin S. (2009). Do differences in financial development explain the global pattern of current account imbalances. Review of International Economics, vol. 17, No. 4, 667-688.
40. Gruber, J. and Kamin S. (2009). Do differences in financial development explain the global pattern of current account imbalances. Review of International Economics, vol. 17, No. 4, 667-688.
41. Hanushek, E. A. and Shultz, G.P. (2012). Education Is the Key to a Healthy Economy. The Wall Street Journal.
42. Hanushek, E. A. and Shultz, G.P. (2012). Education Is the Key to a Healthy Economy. The Wall Street Journal.
43. Horwitz, F. (2005). HR CAN Competitiveness advance. Executive Business Brief, 10, 50-52.
44. Horwitz, F. (2005). HR CAN Competitiveness advance. Executive Business Brief, 10, 50-52.
45. IMF World Economic Outlook (2019). Global Manufacturing Downturn, Rising Trade Barriers. https://www.imf.org/en/Publications/WEO/Issues/2019/10/01/world-economic-outlook-october-2019 (Retrieved from.16.04.2021)
46. IMF World Economic Outlook (2019). Global Manufacturing Downturn, Rising Trade Barriers. https://www.imf.org/en/Publications/WEO/Issues/2019/10/01/world-economic-outlook-october-2019 (Retrieved from.16.04.2021)
47. Ju, J. and Wei S-J. (2006).A Solution to Two Paradoxes of International Capital Flows. NBER Working Paper, 12668.
48. Ju, J. and Wei S-J. (2006).A Solution to Two Paradoxes of International Capital Flows. NBER Working Paper, 12668.
49. Kheng, V., Sun, S. and Anwar, S. (2017). Foreign direct investment and human capital; a panel data approach. Economic Change and Restuctruring, 50 (4), 341-365.
50. Kheng, V., Sun, S. and Anwar, S. (2017). Foreign direct investment and human capital; a panel data approach. Economic Change and Restuctruring, 50 (4), 341-365.
51. Kar, S. (2013). Exploring the causal link between FDI and human capital development in India. Decision, 40(1–2), 3–13.
52. Kar, S. (2013). Exploring the causal link between FDI and human capital development in India. Decision, 40(1–2), 3–13.
53. Legg, A., Prasad N. and Robinson T. (2011). Global Imbalances and the Global Saving Glut- A Panel Data Assessment. Economic Research Department Reserve Bank of Australia Research Discussion Paper, 2007-11.
54. Legg, A., Prasad N. and Robinson T. (2011). Global Imbalances and the Global Saving Glut- A Panel Data Assessment. Economic Research Department Reserve Bank of Australia Research Discussion Paper, 2007-11.
55. Lewin, A. Y., Massini, S. and Peters, C. (2009). Why are companies off shoring innovation? The emerging global race for talent?, Journal of International Business Studies, 40, 901–925.
56. Lewin, A. Y., Massini, S. and Peters, C. (2009). Why are companies off shoring innovation? The emerging global race for talent?, Journal of International Business Studies, 40, 901–925.
57. Lim, S. S., Updike, R. L., Kaldjian A. S, Barber R. M., Cowling K., York H., Friedman J., Xu R., Whisnant J. L., Taylor H. J., Leever A. T., Roman Y., Bryant M. F., Dieleman N J., Gakidou E. and Murray C. J. L. (2018). Measuring human capital: a systematic analysis of 195 countries and territories, 1990–2016. The Lancet, Volume 392, Issue 10154, Pages 1217-1234.
58. Lim, S. S., Updike, R. L., Kaldjian A. S, Barber R. M., Cowling K., York H., Friedman J., Xu R., Whisnant J. L., Taylor H. J., Leever A. T., Roman Y., Bryant M. F., Dieleman N J., Gakidou E. and Murray C. J. L. (2018). Measuring human capital: a systematic analysis of 195 countries and territories, 1990–2016. The Lancet, Volume 392, Issue 10154, Pages 1217-1234.
59. Lucas, R. E. (1988). On the Mechanism of Economic Development. Journal of Monetary Economics, 22: 3- 22.
60. Lucas, R. E. (1988). On the Mechanism of Economic Development. Journal of Monetary Economics, 22: 3- 22.
61. Mankiw, N., Romer, D., & Weil, D. (1992). A contribution to the empirics of economic growth. The Quarterly Journal of Economics, 107, 407−437.
62. Mankiw, N., Romer, D., & Weil, D. (1992). A contribution to the empirics of economic growth. The Quarterly Journal of Economics, 107, 407−437.
63. Ndeffo, N. (2010). Foreign direct investments and human capitaldevelopment in Sub-Saharan Africa, Luc. Annals of “Dunarea de Jos” University of Galati: Fascicle 1. Economics and Applied Informatics, 16(2), 37–50.
64. Ndeffo, N. (2010). Foreign direct investments and human capitaldevelopment in Sub-Saharan Africa, Luc. Annals of “Dunarea de Jos” University of Galati: Fascicle 1. Economics and Applied Informatics, 16(2), 37–50.
65. Noorbakhsh F., Paloni A. and Youssef A. (2001). Human Capital and FDI Inflows to Developing Countries: New Empirical Evidence. World Development, Volume 29, Issue 9, 2001, Pages 1593-1610.
66. Noorbakhsh F., Paloni A. and Youssef A. (2001). Human Capital and FDI Inflows to Developing Countries: New Empirical Evidence. World Development, Volume 29, Issue 9, 2001, Pages 1593-1610.
67. Pedroni, P. (2001). Purchasing Power Parity Tests in Cointegrated Panels. The Review of Economics and Statistics, 83 (4), 727-731.
68. Pedroni, P. (2001). Purchasing Power Parity Tests in Cointegrated Panels. The Review of Economics and Statistics, 83 (4), 727-731.
69. Pelinescu, E. (2015). The Impact of Human Capital on Economic Growth. Procedia Economics and Finance, Volume 22, Pages 184-190.
70. Pelinescu, E. (2015). The Impact of Human Capital on Economic Growth. Procedia Economics and Finance, Volume 22, Pages 184-190.
71. Pereira, J. and Aubyn M. S. (2009). What level of education matters most for growth? Evidence from Portugal. Economics of Education Review, Volume 28, Issue 1, Pages 67-73.
72. Pereira, J. and Aubyn M. S. (2009). What level of education matters most for growth? Evidence from Portugal. Economics of Education Review, Volume 28, Issue 1, Pages 67-73.
73. Pesaran, M.H. (2004). General Diagnostic Tests for Cross Section Dependence in Panels. CESifo Working Paper, 1229: 1-40.
74. Pesaran, M.H. (2004). General Diagnostic Tests for Cross Section Dependence in Panels. CESifo Working Paper, 1229: 1-40.
75. Pesaran, M.H. (2007). A Simple Panel Unit Root Test in the Presence of Cross-Section Dependence. Journal of Applied Econometrics, 22(2): 265-312.
76. Pesaran, M.H. (2007). A Simple Panel Unit Root Test in the Presence of Cross-Section Dependence. Journal of Applied Econometrics, 22(2): 265-312.
77. Romer, P. (1990). Human capital and growth: theory and evidence. Carnegie Rochester Conference Series on Public Policy, 32, pp.251-286.
78. Romer, P. (1990). Human capital and growth: theory and evidence. Carnegie Rochester Conference Series on Public Policy, 32, pp.251-286.
79. Self, S. and Grabowski, R. (2004). Does education at all levels cause growth? India, a case study, Economics of Education Review, 23, 47−55.
80. Self, S. and Grabowski, R. (2004). Does education at all levels cause growth? India, a case study, Economics of Education Review, 23, 47−55.
81. Siddiqui A. and Rehman A. (2017). The human capital and economic growth nexus: in East and South Asia. Applied Economics, vol.49, issue 28, 2697-2710.
82. Siddiqui A. and Rehman A. (2017). The human capital and economic growth nexus: in East and South Asia. Applied Economics, vol.49, issue 28, 2697-2710.
83. Suliman, A. H. and Mollick, A. V. (2009). Human capital development, war and foreign direct investment in Sub-Saharan Africa. Oxford Development Studies, 37(1), 47–61.
84. Suliman, A. H. and Mollick, A. V. (2009). Human capital development, war and foreign direct investment in Sub-Saharan Africa. Oxford Development Studies, 37(1), 47–61.
85. Swamy P. (1971). Statistical Inference in A Random Coeffeicient Regression Model. Econometrica 38(2), 311-322.
86. Swamy P. (1971). Statistical Inference in A Random Coeffeicient Regression Model. Econometrica 38(2), 311-322.
87. Tatoğlu, F.Y. (2017). Panel Zaman Serileri Analizi. Beta Basım Yayım Dağıtım.
88. Tatoğlu, F.Y. (2017). Panel Zaman Serileri Analizi. Beta Basım Yayım Dağıtım.
89. United Nations Development Programme (2020). Human Development Report, Human Development Index. http://hdr.undp.org/en/content/human-development-index-hdi (Accessed 16.11.2020).
90. United Nations Development Programme (2020). Human Development Report, Human Development Index. http://hdr.undp.org/en/content/human-development-index-hdi (Accessed 16.11.2020).
91. UNCTAD World Investment Report (2020). International Production Beyond the Pandemic (UNCTAD/WIR/2020).
92. UNCTAD World Investment Report (2020). International Production Beyond the Pandemic (UNCTAD/WIR/2020).
93. Zhang, K. H. and Markusen J. R. (1999). Vertical multinationals and host-country characteristics. Journal of Development Economics, Volume 59, Issue 2.
94. Zhang, K. H. and Markusen J. R. (1999). Vertical multinationals and host-country characteristics. Journal of Development Economics, Volume 59, Issue 2.