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

How are Derivative Accounting Applied for Hedging Activities?

The derivative instruments accounting plays an important role in the development of the financial instruments markets, commodity market and in the risk management process. Because, the close relationship between the meth...

The Effect of Fraud Risk Management, Risk Culture, on the Performance of Nigerian Banking Sector: Preliminary Analysis

Fraud has become the most viable threat to the global economy requiring maximum attention of forensic accountants and traditional auditors, as well as anti-graft bodies worldwide. The primary objective of this paper is t...

Perception of Undergraduate Accounting Students towards Professional Accounting Career

Prior studies indicate that people’s perception have an important influence on their career decision. Career decision plays a major role in the way students recognize their future career prospects. There are lots of dete...

Download PDF file
  • EP ID EP164283
  • DOI 10.6007/IJARAFMS/v6-i1/1930
  • Views 111
  • 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