Human Capital and Economic Growth in Asian Countries

Abstract

This paper investigates the causal relationship between education and GDP in 40 Asian countries by using panel unit root tests and panel cointegration analysis for the period 1970-2010. A three-variable model is formulated with capital formation as the third variable. The results show a strong causality from investment and economic growth to education in these countries. Yet, education does not have any significant effects on GDP and investment in short- and long-run. It means that it is the capital formation and GDP that drives education in mentioned countries, not vice versa. So the findings of this paper support the point of view that it is higher economic growth that leads to higher education proxy. It seems that as the number of enrollments raise, the quality of the education declines. Moreover, the formal education systems are not market oriented in these countries. This may be the reason why huge educational investments in these developing countries fail to generate higher growth. By promoting practice-oriented training for students particularly in technical disciplines and matching education system to the needs of the labor market, it will help create long-term jobs and improve the country’s future prospects.

Authors and Affiliations

Alireza Behrooznia, Reza Shafizadeh, Ali Laalbar, Abbas Rezazadeh Karsalari

Keywords

Related Articles

Why Does Turkey Have a Chronic Current Account Deficit? An Empirical Analysis

Turkey faces a significant current account deficit since beginning of the first half of 2000s. The main objective of this study is to investigate the factors which affects the current account balance of Turkey for the pe...

Index Prediction in Tehran Stock Exchange Using Hybrid Model of Artificial Neural Networks and Genetic Algorithms

Nowadays, investment in the bource organizes the important part of country economy. So the prediction of stocks index is very important for stockholders to earn the highest return from their investment. The changes of st...

A Comparison of Ratios and Data Envelopment Analysis: Efficiency Assessment of Taiwan Public Listed Companies

The need to assess business firm’s efficiency is important for all players involved in a business. Efficiency assessment has previously been conducted using financial ratio analysis. However, it failed when simultaneousl...

Download PDF file
  • EP ID EP164283
  • DOI 10.6007/IJARAFMS/v6-i1/1930
  • Views 107
  • Downloads 0

How To Cite

Alireza Behrooznia, Reza Shafizadeh, Ali Laalbar, Abbas Rezazadeh Karsalari (2016). Human Capital and Economic Growth in Asian Countries. International Journal of Academic Research in Accounting, Finance and Management Sciences, 6(1), 1-6. https://europub.co.uk/articles/-A-164283