How financial development and economic growth influence human capital in low-income countries

Abstract

PurposeThis research aims to explain the effect of financial indicators and economic growth on human capital in low-income countries.Design/methodology/approachWe gathered balanced panel data from 1980 to 2016 over a sample of 12 low-income countries categorized by World Development Indicators. The data stationary properties were analyzed by unit root test while the existence of a long-run relationship among the variables was confirmed by cointegration test. We performed Hausman test to differentiate between the fixed effect and random effect model. The sensitivity analysis confirmed the robustness of the results.FindingsOur findings indicated that broad money supply and private sector credit has a positive and significant impact on human capital. Interestingly, bank credit showed a negative and significant effect on human capital. We also found a significant positive relationship between human capital and economic growth in the study sample.Originality/valueThis is a preliminary study using financial development and human capital in low-income countries with panel econometric techniques as an analysis tool. Overall, we suggest a policy to focus on the financial sector development and economic growth to produce sustainable human capital.

Kausalitas Pembangunan Keuangan dan Pembangunan Sumber Daya Manusia di ASEAN-4

“…Negara maju mendorong iklim dan meningkatkan sumber daya investasi untuk mempengaruhi peningkatan kesejahteraan masyarakat baik secara langsung maupun tidak langsung. Sebaliknya, pada studi empiris yang dilakukan oleh (Ali et al, 2021), negara dengan tingkat pendapatan yang rendah atau negara berkembang, masyarakat berharap adanya transisi ekonomi yang sehat yang dapat meningkatkan keterampilan (skills) dan standar hidup. Hubungan antara pembangunan finansial dan pertumbuhan ekonomi telah mendapat perhatian dari para pakar ekonomi sejak awal abad ke-19.…”

Dampak Health Capital Terhadap Pertumbuhan Ekonomi: Pembuktian Dari Negara Terpilih Di Asia Tenggara Dengan Pendekatan Model Autoregressive Distributed Lag (Ardl)

“…Ketika negaranegara beralih menuju ekonomi yang berbasis pengetahuan, maka keberadaan sumber daya manusia yang sangat terampil menjadi semakin penting (Rosendo Silva et al, 2018). Sudah banyak penelitian yang menyoroti Human Capital sebagai penentu utama pertumbuhan ekonomi (Ali et al, 2021;Anetor, 2020;Apergis et al, 2022;Duan et al, 2022;Ibrahim, 2018;Neeliah & Seetanah, 2016;Sehrawat & Giri, 2017;Tahir et al, 2020;Tandrayen Ragoobur & Narsoo, 2022). Namun pada kondisi saat ini peran dari health capital secara intens menjadi fokus penelitian dari akademisi (Isreal Akingba et al, 2018).…”

Causal association of entrepreneurship ecosystem and financial inclusion

“…Therefore, economic development is significantly associated with the entrepreneurship ecosystem and entrepreneurial skills of people in a country. Previous studies have reported a positive impact of entrepreneurship ecosystem on economic development [ [1] , [2] , [3] , [4] , [5] , [6] ]. The growth of new firms, start-ups and businesses achieve sustainability in long-term in an entrepreneurship ecosystem [ 7 ].…”