No full-text available
To read the full-text of this research,
you can request a copy directly from the authors.
Economic growth, human capital and structural change: A dynamic panel data analysis
Abstract
Human capital is identified as one of the main determinants of economic growth and plays an important role in the technological progress of countries. Nevertheless, existing studies have to some extent neglected the importance of human capital in the growth process via the interaction it can have with a country’s industrial specialization. Additionally, the emphasis is mainly placed on supply-side determinants, while demand-side factors are neglected, particularly the relevance of the processes of structural change. Thus, using a growth model which integrates variables from both the supply side and demand side, we assess the direct and indirect effects of human capital on economic growth, including in the latter the interaction of human capital with the industrial specialization of countries. Based on dynamic panel data estimations, we found that human capital and the countries’ productive specialization dynamics are crucial factors for economic growth. Moreover, the interaction between human capital and structural change in high knowledge-intensive industries impacts significantly on economic growth. However, the sign of this effect depends on the type of country and the period of analysis. Specifically, over a longer time span (1960–2011) and for more highly developed (OECD) countries, the impact of the interaction between human capital and structural change is positive. When we also include transition and Mediterranean countries over a shorter time period (1990–2011), we find that human capital significantly and positively impacts on the countries’ economic growth but the effect of human capital via specialization in high-tech and knowledge-intensive activities is negative. The latter result indicates that the lack of industrial structures able to properly integrate highly educated individuals into the productive system leads countries to experience disappointing economic returns.
... For instance, Ogundari and Awokuse [2018] focused on the human capital-economic growth nexus in Sub-Saharan African countries. Similarly, Teixeira and Queirós [2016] explain this phenomenon in the OECD region, and Siddiqui and Rehman [2017] in Asian countries. However, Balkan countries as a region are less focused on in the current literature. ...
... Moreover, Wang et al. [2022] discovered that an efficient workforce has a major impact on economic growth in China. Another study by Teixeira and Queirós [2016] used panel data analysis to observe the dynamic relationship between these two variables in OECD countries and supported the positive relationship between economic growth and human capital. ...
... Thus, the results reveal the presence of skilful labour positively contributes to economic development. Teixeira and Queirós [2016] also concluded the positive relationship of human capital with economic development. Likewise, Keji [2021] also established the long and short-run Table 3. Impact of human capital on economic growth (GLM model) Notes: Standard errors in parentheses,*** p<0.01, ** p<0.05, * p<0.1. ...
This study empirically examines the relationship between human capital and economic growth in 8 Balkan countries over the period of 2000–2019. The study considers an array of statistical techniques such as the Generalized Linear Model (GLM) regression, the Dricroll–Kraray approach (D–K), and the System GMM (S-GMM) for data analysis. The study documents the positive and statistically significant impact of human capital on economic development. The analysis of the selected subsample of countries also established the positive role of human capital in shaping economic growth. The findings suggest that policymakers may design a comprehensive human development-related policy to achieve sustainable economic growth, at least in the Balkan region.
... Suppressed economic growth can lead to expansion of the size of the SE as legal businesses push and shrink their market share, while ECOG decline gives rise to the desire to engage in SE activities (Baklouti and Boujelbene 2020). It is also found in the literature that lagged levels of economic growth may affect their current values (Teixeira et al. 2016; Baklouti and Boujelbene 2019; Baklouti and Boujelbene 2020). ...
... Regarding the control variables in all the models, the initial income consistently exhibited a negative and significant relationship with ECOG. This outcome confirms the existence of conditional convergence among the selected developing countries, as observed in the study by Teixeira and Queiros (2016). Phy.Cap displayed a positive and significant impact on ECOG, and this finding aligns with previous research conducted by Barro (2003). ...
Shadow Economy and Economic Growth Nexus in Developing Countries: What is the Role of Financial Inclusion?
Authors
Ahmad Waqar, Hussain Babar, Muhammad Waqas Khalid, Fatima Lambarraa-Lehnhardt, Muhammad Umair
Description
Shadow economy (SE) creates a significant barrier to economic progress in developing economies, whereas financial inclusion (FINI) plays a crucial role in boosting economic performance. This study examines the impact of the SE on economic growth (ECOG) and explores how this relationship is moderated by FINI. We use two key dimensions of FINI including financial market development (FMD) and financial institution development (FID). We apply system GMM and difference GMM techniques on a dataset of 120 selected developing economies worldwide, spanning the years 2002 to 2020. The estimation results reveal that a sizeable SE significantly hampers ECOG, while higher levels of FINI improve it. Additionally, financial inclusion, particularly through the development of financial markets and institutions, moderates the adverse effects of the SE on ECOG, suggesting a significant substitutability between the SE and FINI. This indicates that increasing FINI can reduce the shadow economy's size and mitigate its harmful effect on ECOG. These results remain robust when using an alternative measure of the SE. Based on the findings; we recommend that governments promote financial inclusion initiatives, such as expanding banking services, advancing mobile banking, and increasing financial literacy.
... The average years of schooling have been used as a proxy for human capital by Zhang and Wang (2021), Zhang et al. (2023), and Teixeira and Queirós (2016). Other studies employ the gross enrollment ratio for secondary school (Ibrahim, 2018;Marelli et al., 2019;Alataş, 2023) and the percentage of the workforce with upper secondary education or higher (Zhang & Wang, 2021) as a proxy for human capital. ...
... Furthermore, Zhang et al. (2023) found that cognitive human capital production, reflected by average years of schooling, positively impacted income convergence. Similarly, Teixeira and Queirós (2016) emphasized that countries with a higher average year of schooling tend to grow faster than others as a proxy of human capital stock. Breton (2015) also found that when average schooling attainment increases per year, the GDP of Japan rises by 20%. ...
Research Originality: This study takes a novel approach to analyzing the impact of human capital on income convergence in ASEAN-8 countries by comparing three indicators. This comparative analysis provides a more comprehensive understanding of human capital dynamics in ASEAN's economic convergence.Research Objectives: This study investigates the impact of human capital on income convergence by applying the concept of β-convergence to the ASEAN-8 countries.Research Methods: The analysis of β-convergence is based on the basic and augmented Solow growth models. The estimation is conducted using static and dynamic panel data regression from 1995 to 2019.Empirical Result: The results reveal the existence of absolute and conditional β-convergence in ASEAN-8 countries, suggesting that poor countries grow faster than rich countries, with human capital playing a crucial role in this process. Human capital, measured by average years of schooling, tertiary gross enrolment ratio, and HCI, are important factors that significantly increase income convergence.Implications: ASEAN-8 governments need to establish policies that enhance human capital, particularly in education, by increasing educational attainment and the rate of return to education.JEL Classification: E24, O47, C13How to Cite:Suprayitno, A. W., & Gitaharie, B. Y. (2025). Human capital as a Catalyst for Income Convergence: Evidence from ASEAN-8 Countries. Etikonomi, 24(1), 265 – 284. https://doi.org/10.15408/etk.v24i1.41571.
... In addition, infrastructure is one of the significant determinants of reducing transportation costs for businesses and the most vital determinant of direct investment in developing countries. A good infrastructure creates favorable conditions for businesses' production and activities and helps companies reduce unnecessary investment risks (Makki & Somwaru, 2004;Nwaogu & Ryan, 2015;Teixeira & Queiros, 2016). It can be said that the development of infrastructure in each country is a necessary condition for making investment decisions for enterprises. ...
... The standardized estimate is 0.108 and with a significance level of 0.01. This result is consistent with previous studies (Makki & Somwaru, 2004;Nwaogu & Ryan, 2015;Teixeira & Queiros, 2016). This is the fifth impactful of the five factors and must be prioritized fifthly. ...
Economic development is an activity aimed at the country's economic growth and is always required in association with a rational, progressive, and social economic structure. Economic development is a significant and necessary factor in the current period. Thus, this article aims to identify the key policy factors affecting economic development and proposed policy recommendations in Vietnam. The primary data is collected through focus group discussions and surveys of 550 experts in the economic field to clarify the impact of the policy on economic operations in Vietnam. The article applied the qualitative and quantitative methods using structural equation modeling (SEM) and SPSS 20.0, Amos software. The article finds five factors affecting Vietnam's economic development with a significance level of 0.01, and five hypotheses are accepted. The article's novelty is determining the tax policy factor that most substantially impacts economic development. Finally, the article's value proposes vital policy recommendations for Vietnam's economic development in the following years.
... (Krüger, 2008;Rodrik, 2013). In another sense, the lack of economic modernization towards higher technological level activities can discourage human capital accumulation, e.g., if an economy faces a poor structural change which cannot absorb the new highly educated workers, it can generate disappointing economic returns to education which might reduce the accumulation of human capital as well as depreciation in human capital stock (Teixeira & Queirós, 2016). ...
... Therefore, they stimulate the accumulation of human capital by boosting demand and the rate of return on education, due to higher levels of training. This creates a feedback loop: greater human capital produces an increased capacity for technological absorption, (Teixeira & Queirós, 2016). In addition, structural change is often accompanied by economic diversification. ...
The present study defines three pillars that, from a macroeconomic and institutional perspective, influence the accumulation of human capital: (1) Deepening physical capital, measured by the stock of physical capital; (2) economic modernization, captured by ICTs and structural change; and (3) institutions and policies, which are respectively gauged by institutional quality and freedom to trade internationally. The methodological procedure involved two approaches. Firstly, we have estimated the models by using a new instrumental variable approach (a conditional mean estimates). We found that the three pillars have a positive impact on human capital. While the first pillar has the same impacts on both women’s and men’s human capital, the second and third pillars show distinct impacts on human capital accumulation depending on gender. Therefore, structural change and the quality of institutions exert a greater influence on the female human capital, while ICTs and openness are more pertinent to the accumulation of human capital among males. Finally, we implement a panel-data quantile regression analysis in order to detect whether differences are observed according to the different levels of economic development. We found a growing effect from physical capital stock to human capital and some differential gender impacts at first quantiles which tend to disappear at last quantiles. The variables included in the second and third pillars usually have a declining impact once we move towards the upper quantiles and show some differential impact depending on the gender.
... Instruments are considered valid when there is no correlation between the error term and the instruments, which is tested using Sargan and Hansen tests. Second-order serial correlation is tested using Arellano-Bond tests (Teixeira & Queirós, 2016). There are two different types of System GMM estimators: one-step and two-step methods, depending on whether the weighting matrix is homogeneous or heterogenous. ...
... However, System GMM can produce many instruments as the number of periods increases, which can lead to overfitting and decreased model specification (Roodman, 2009). Therefore, the use of the one-step GMM is recommended for models with a small number of countries and a longer time period (Teixeira & Queirós, 2016). The one-step GMM estimator is particularly noted for its strength in small samples and is less sensitive to instrument proliferation compared to the two-step GMM. ...
Given the pivotal role of the Association of Southeast Asian Nations (ASEAN) in global trade and the region’s increasing integration within international supply chains, this study investigates the impact of logistics performance on export market penetration among ASEAN countries. Using the Generalized Method of Moments (GMM) one-step estimator, the study analyzes dynamic panel data comprising annual observations on logistics performance indicators, export market penetration metrics, and macroeconomic variables such as inflation rates and intertrade volumes from 2000 to 2022. The results reveal that logistics infrastructure, including international sea container throughput and international sea cargo throughput, significantly enhances the ability of ASEAN countries to access export markets. Findings in improving the liner shipping connectivity index can increase export capacity by up to 2.82%, underscoring the importance of investing in robust maritime infrastructure. Additionally, the study demonstrates that inflation negatively affects export market penetration, emphasizing the necessity for effective inflation control to enhance export competitiveness. The study concludes with recommendations for strengthening logistics infrastructure and fostering regional trade integration in ASEAN to boost export performance in global markets. These insights offer valuable guidance for policymakers and industry stakeholders in formulating strategies to improve trade logistics and elevate export outcomes across the region.
... Taking a cue from previous studies like Barro and Sala-i-Martin (2003); Teixeira and Queirós (2016) and Asante et al., (2023), the equation employed is specified as: ...
... Human capital plays a critical role in economic growth across the world. Studies like Teixeira and Queirós (2016), Chen and Fang (2018), Han and Lee (2020) and Farida, Suman and Sakti (2021) also found that human capital enhances economic growth. As expected, inflation hurts economic growth in models 1 and 2, while we cannot confirm this in other models as its coefficient is insignificant. ...
This paper investigates how institutional environments shape the relation between insurance development and economic growth nexus in a panel of 39 sub-Saharan African countries from 1991 to 2018 using the two-step system Generalised Method of Moment (GMM) estimation technique. The results show that total insurance, life insurance, and non-life insurance positively impacted economic growth. While the political environment and the rule of law enhance economic growth, economic freedom, and legal and property rights hurt it. Finally, the interaction of insurance and institutional quality variables is associated with lower growth. These results not only support North's (1990) argument that institutions play a critical role in nations' economic growth but corroborate the hypothesis that unhealthy political institutions could deter the growth-effect of insurance. The findings from this study underlie the importance of strengthening the institutional factors to enhance insurance development's impact on economic growth in Africa.
... Individuals' competence and specialty can vary significantly, as they do not only possess diverse knowledge and skills but also exhibit significant differences in their capacity and speed for learning and comprehension (Hatch & Dyer, 2004). Existing literature argues that more educated individuals with higher creativity and productivity positively impact innovation, economic growth, and organizational effectiveness (Eklund & van Criekingen, 2022;Pinto & Teixeira, 2024;Teixeira & Queiros, 2016). These studies have made a key assumption-using the average years of education, normally the only measurement of human capital in their models, to proxy for human capital competence-and then analyzed its effect on economic growth and organizational benefits. ...
... Based on human capital theory, individuals can cultivate their cognitive and noncognitive skills by education to implement innovation-related activities (Cunha & Heckman, 2007). Human capital can help organizations absorb external knowledge and explore new skills and ideas (Emre Yildiz et al., 2021), while those with higher education level are more innovative in creating new products and improving production factors (Teixeira & Queiros, 2016). This suggests that higher level of humancapital education leads to greater benefit in innovation activities. ...
Innovation plays a vital role in societal and economic development, with human capital being a key driver for innovation by the development and absorption of new knowledge. However, there is a lack of research on the role of human capital with different levels of higher education (i.e., tertiary, master’s, and doctoral levels) in innovation performance. Therefore, this paper proposes a two-stage Data Envelopment Analysis-Stochastic Frontier Analysis (DEA-SFA) method to examine the relationship between human-capital education level and innovation efficiency. In the first stage, DEA is used to acquire separate innovation efficiency scores for each decision-making unit (i.e., organization possessing human capital). In the second stage, SFA is utilized to estimate the impact of human-capital educational level on innovation efficiency. The empirical results show a surprising U-shaped relationship between human-capital education level and innovation efficiency, and we find that human capital with a tertiary level have a more positive effect than that with a master’s level. In addition, this study finds that innovation intermediaries show a moderating role in the relationship between human-capital educational level and innovation efficiency. This study offers implications for both policymakers and managers on how to cultivate and recruit suitable human capital for higher innovation performance.
... Suppressed economic growth can lead to expansion of the size of the SE as legal businesses push and shrink their market share, while ECOG decline gives rise to the desire to engage in SE activities (Baklouti and Boujelbene 2020). It is also found in the literature that lagged levels of economic growth may affect their current values (Teixeira et al. 2016; Baklouti and Boujelbene 2019; Baklouti and Boujelbene 2020). ...
... Regarding the control variables in all the models, the initial income consistently exhibited a negative and significant relationship with ECOG. This outcome confirms the existence of conditional convergence among the selected developing countries, as observed in the study by Teixeira and Queiros (2016). Phy.Cap displayed a positive and significant impact on ECOG, and this finding aligns with previous research conducted by Barro (2003). ...
Shadow economy (SE) creates a significant barrier to economic progress in developing economies, whereas financial inclusion (FINI) plays a crucial role in boosting economic performance. This study examines the impact of the SE on economic growth (ECOG) and explores how this relationship is moderated by FINI. We use two key dimensions of FINI including financial market development (FMD) and financial institution development (FID). We apply system GMM and difference GMM techniques on a dataset of 120 selected developing economies worldwide, spanning the years 2002 to 2020. The estimation results reveal that a sizeable SE significantly hampers ECOG, while higher levels of FINI improve it. Additionally, financial inclusion, particularly through the development of financial markets and institutions, moderates the adverse effects of the SE on ECOG, suggesting a significant substitutability between the SE and FINI. This indicates that increasing FINI can reduce the shadow economy's size and mitigate its harmful effect on ECOG. These results remain robust when using an alternative measure of the SE. Based on the findings; we recommend that governments promote financial inclusion initiatives, such as expanding banking services, advancing mobile banking, and increasing financial literacy.
... The approach proposed by Barro & Sala-i-Martin (2003) and Teixeira and Queirós (2016), adapted for a non-dynamic panel, was used to model the causal effect between the growth rate of qualified labor and the economic growth rate. This can be formulated as follows: ...
... This evidence validates the objective of this research (whether there is an effect of the growth rate in the demand for qualified labor in manufacturing on the rate of economic growth in Brazilian municipalities). It supports the arguments of the primary theoretical approach to economic growth, which suggests that improving human capital increases the quality of the workforce and supports the development of more advanced and sophisticated skills while stimulating creativity and the absorption of imported technologies, significantly affecting productivity and economic growth (Teixeira & Queirós, 2016;Doré & Teixeira, 2023). Other studies in Brazil have also demonstrated this positive and direct impact of formal education on growth (Silva & Cunha, 2017;Sá et al., 2019). ...
The Brazilian manufacturing has exchanged occupations with low education levels for occupations with high education levels, such as higher education, master's, and doctoral degrees. Therefore, the aim of this study is to verify if the growth rate in the demand for skilled labor in manufacturing affects the economic growth rate in Brazilian municipalities. As an econometric strategy, the proposal is, in addition to the use of panel data, to use instrumental variables (Bartik Instrument - shift-share) to address the endogeneity of the relationship between the employment growth rate in manufacturing and economic growth. The main results indicate that the growth rate of demand for skilled labor in manufacturing has a positive effect on the economic growth rate of municipalities and generates spillover effects for the sectors of agriculture and services. The evidence also points out that there is no differential effect for municipalities that belong to metropolitan or non-metropolitan regions, except for the GDP per capita metric.
... The approach proposed by Barro & Sala-i-Martin (2003) and Teixeira and Queirós (2016), adapted for a non-dynamic panel, was used to model the causal effect between the growth rate of qualified labor and the economic growth rate. This can be formulated as follows: ...
... This evidence validates the objective of this research (whether there is an effect of the growth rate in the demand for qualified labor in manufacturing on the rate of economic growth in Brazilian municipalities). It supports the arguments of the primary theoretical approach to economic growth, which suggests that improving human capital increases the quality of the workforce and supports the development of more advanced and sophisticated skills while stimulating creativity and the absorption of imported technologies, significantly affecting productivity and economic growth (Teixeira & Queirós, 2016;Doré & Teixeira, 2023). Other studies in Brazil have also demonstrated this positive and direct impact of formal education on growth (Silva & Cunha, 2017;Sá et al., 2019). ...
The Brazilian manufacturing has exchanged
occupations with low education levels for
occupations with high education levels, such
as higher education, master’s, and doctoral
degrees. Therefore, the aim of this study is
to verify if the growth rate in the demand
for skilled labor in manufacturing affects
the economic growth rate in Brazilian municipalities.
As an econometric strategy, the
proposal is, in addition to the use of panel
data, to use instrumental variables (Bartik Instrument
- shift-share) to address the endogeneity
of the relationship between the employment
growth rate in manufacturing and
economic growth. The main results indicate
that the growth rate of demand for skilled
labor in manufacturing has a positive effect
on the economic growth rate of municipalities
and generates spillover effects for the
sectors of agriculture and services. The evidence
also points out that there is no differential
effect for municipalities that belong to
metropolitan or non-metropolitan regions,
except for the GDP per capita metric.
... When the error term and the instruments do not correlate, as determined by the Sargan and Hansen tests, the instruments are deemed legitimate. (Teixeira & Queirós, 2016)state that the Arellano-Bond tests are used to test for second-order serial correlation. ...
... However, System GMM can produce numerous instruments as the number of periods increases, potentially leading to model overfitting and reduced model specification (Roodman, 2009b). Therefore, the one-step System GMM is recommended for models with a small number of countries and a longer time period (Teixeira & Queirós, 2016). The one-step GMM estimator is particularly robust in small samples and is less sensitive to instrument proliferation compared to the two-step GMM. ...
The study aimed to explore and measure the impact of innovation on competitive industrial performance (CIP) in the BRICS economies for the period 2011-2022, and the Global Innovation Index (GII) was used to measure the impact of innovation on the dependent variable, and some independent explained variables such as: the percentage of workers in industry of the total workforce, quality of regulation, rule of law, foreign direct investment and GDP, to test the relationship between these variables and competitive industrial performance (CIP).
... The dominant essentialist orthodoxy of development, a concept that emerged after World War II, frames universities as vehicles for producing human capital, driven by the need for international economic growth (Chankseliani and McCowan, 2021). This view is rooted in human capital theory, which posits that investing in universities directly correlates with economic progress, as evidenced by return-on-investment models (Oketch et al., 2014;Teixeira and Queirós, 2016). ...
English-medium instruction (EMI) has often been implemented through ill-thought-out institutional/national strategic decisions, typically driven by the internationalisation of higher education. In this context, EMI research seems to be condensed on problem identification and trends, focusing on English language issues, pedagogical challenges, and stakeholder perceptions. This narrow focus appears to have reached a saturation point, underscoring the need for a reform-driven approach-one that prioritises structural transformation and problem-solving. Addressing this gap, this political normative paper argues that the professionalisation of EMI at the tertiary level represents the way forward. Situated within the broader contexts of global capitalism and neoliberalism, this paper takes a Critical EMI stance to examine the role of EMI in higher education. It proposes a structured, solution-oriented approach, grounded in three interrelated critical concepts: multilingualism, universities as sites for liberation, and English as an international language. EMI policy and quality are structured around three cyclic stages, with academic learning outcomes at the core. Rather than offering a rigid framework, this paper introduces the EMI Professionalisation Framework (EMI ProF) as a guiding political normative model informed by prior research to drive the EMI reform and support the professionalisation agenda. Key definitions of EMI quality, professionalisation of EMI, EMI professionals, and EMI content-teacher competence are provided.
... • The effect of human capital on EG: Human capital refers to the intangible resources that are inherent in the labor force and enhance its productivity (Teixeira & Queirós, 2016). Human capital refers to the collective value of attributes possessed by the workforce, including knowledge, skills, experience, and motivation, which contribute to the more efficient and effective utilization of other production elements. ...
This study examines the long-term impact of physical capital, labor, and productive capacity on economic growth in the BRICS countries from 2000 to 2022. The cointegration relationship was established for this purpose, and the long-term coefficients were derived using the Moment Quantile Regression Method (MM-QR). The results indicate that economic growth is statistically significant and positively influenced by physical capital and labor in all quantiles. Nevertheless, it was noted that the quantile level increased, resulting in a decrease in the positive effect. The Productive Capacity Index, which is the focal point of the investigation, has a generally beneficial impact on economic growth; however, it was not determined to be statistically significant in the lower quantile groups (0.1, 0.2, and 0.3). With the exception of the 0.8 quantile, the PCI's positive impact gains strength as the quantile level increases in the upper quantile groups. This research makes a substantial contribution to the existing body of literature by offering a novel viewpoint on the dynamics of economic growth in the BRICS countries. Examining the implications of productive capacity at the quantile level can be particularly beneficial for policymakers. The findings are valuable due to the fact that the study is one of the first in this discipline.
... These dimensions are interrelated. Among various benefits of it, Sianesi and Reenen [38]found that the educational dimension tends to enhance health levels of individuals (cited in [42]). Considering the above and because of its nature, human capital is complex and multidimensional [29] thus a thorough way to measure it would take into account both education and health dimensions. ...
... The more skilled labor force can be more productive and efficient than the unskilled workforce. The deficiency of skilled labor can lead to sluggish economic growth (Teixeira and Queirós, 2016). Evolution of fiscal policy and taxes: In Solow's (1956) economic growth model, the role of the public sector is minimal, i.e., there is no active and permanent role played by fiscal policy on long-run economic growth. ...
A B S T R AC T This study is carried out to investigate the impact of taxes on the economic growth of Pakistan. Tax is a compulsory payment to the government by the residents of the nation to cover the cost of services rendered by the government for the general welfare of its citizens. The debate and empirical results regarding the impact of taxes and specifically tax structure is highly controversial for researchers and policymakers. Economic growth is adversely affected by taxes, while some researchers claim a positive effect. Therefore it was felt to investigate the impact of tax structure on the economic growth of Pakistan. To test it empirically, the researcher took the time series data ranges from 1985 to 2021 on tax structure and economic growth. GDP growth is dependent, while tax structure, i.e., direct and indirect taxes, human development index, and income distribution, were selected as independent variables. After ensuring that the variables are stationary, the Autoregressive Distributive Lag (ARDL) approach to co-integration was applied to detect connections between variables. Results found that direct taxes have a positive and significant effect on GDP growth, while indirect taxes have a significant and negative impact on the GDP growth of Pakistan. Also, the impact of HDI on GDP growth is positive and significant, while the Gini coefficient has a negative and significant impact on the GDP growth of Pakistan. It is suggested that to increase the economic growth of Pakistan, direct taxes would be increased, as it will also reduce the Gini coefficient and unequal income distribution, While indirect taxes would be decreased to enhance economic growth. Also, the government should adopt such policies which could encourage human development, as it is crucial for the economic development of Pakistan.
... The differences in the natural environment, economic population, industrial technology, and other aspects caused by geographical differences in China have resulted in imbalances in higher education. Human capital is considered to be one of the main determinants of economic growth [34]. The expansion of the scale of higher education, especially the rapidly expanding group of college students, has provided a huge impetus for the accumulation of high-quality human capital in China, which is an important factor for China's economy to take off [35]. ...
The sustainable development of regional higher education is closely related to the level of regional economic development. There is a close interdependence between higher education and economic development. Based on data from 31 provinces in China in 2022, this study uses the entropy method to construct an evaluation index system to explore the coupling and coordination relationship between the regional economy and the development of higher education, as well as the social network effects presented by various regional cities. The results indicate the following: (1) there is a trend of a more coordinated relationship between economic development and the development of higher education in the eastern region compared to the western region, exhibiting a pattern of “higher in the east and lower in the west”; and (2) the economic development and the scale of higher education in East China and Central China are coordinated, and some provinces have played a role in bridging and internal and external linkages in the spatial network effect, economic development, and the scale of higher education in some provinces in Northwest and Southwest China to moderate the imbalance and weak internal and external linkages in the spatial network. Exploring the compatibility between the scale and structure of higher education and economic development is not only of guiding significance for promoting the regional layout and development of higher education in China, but also has an important reference value for economic structural adjustment and transformation.
... A well-educated person can supervise economic activities more effectively than an uneducated person can. Teixeira and Queirós (2016) argued that education determines the economic prosperity of a country and increases human capital in the workforce. In previous neoclassical models, economists believed that physical capital was the most important factor determining economic growth and development. ...
This study analyzes the impact of social investment in education on economic prosperity in Vietnam during the period 1998–2023 using an autoregressive distributed lag model. The results show that investment in education has a positive impact on economic prosperity in both the short and the long run. Meanwhile, labor has a complex relationship, with a negative but statistically insignificant impact in the long run but a positive short-term impact on economic prosperity. The long-run equilibrium coefficient reflects a fast adjustment speed of approximately 83.1%, bringing the economy back to equilibrium after shocks. This result affirms the essential role of education as a driver of prosperity and resilience in the Vietnamese economy, consistent with global evidence of the impact of human capital development on the economy. Policy recommendations include increasing education budgets, improving labor quality through vocational training, and promoting cooperation between education and businesses to enhance sustainable development and modernize Vietnam's economy.
... This socioeconomic index is practically related to green growth through human intervention in the environment, climate change, and pollution emissions. HDI, often considered as an increase in education or improvement in human capital, is considered one of the important drivers of green economic growth and plays a crucial role in the technological progress of countries [128]. Higher income and human capital, as a collection of knowledge, innovation, and creativity, can protect the environment by engaging in recycling activities [129]. ...
In recent years, policymakers have increasingly focused on both environmental quality and eco-nomic growth. While various factors influence green growth, two important factors that have been overlooked in research are the global innovation index and the fragile states index. This study employs novel methods, such as Necessary Condition Analysis (NCA) and Fuzzy-set Qualitative Comparative Analysis (fsQCA), to analyze green growth across 90 countries in 2019, surpassing traditional regression techniques. The NCA model identifies essential variables for green growth, revealing that global innovation, institutional quality, human development, and globalization are crucial conditions. Conversely, the fsQCA model offers intricate solutions by combining key vari-ables for green growth. It presents five solutions for achieving high green growth, each tailored to specific groups of countries. For instance, Solution 1, with a Consistency of 0.96%, suggests that increased consumption of renewable energy, greater trade openness, and reduced fragility in states lead to higher green growth in countries like Denmark and Austria. Thus, policymakers can foster both economic growth and environmental improvement by promoting renewable energy adoption, enhancing global trade management, and strengthening institutional quality and political stability.
... To construct a gender-specific measure of shifting human capital across two centuries, the human capital of women was assumed to increase in proportion to the growth of women's university enrolment. Although a more commonly used and more comprehensive measure of human capital is educational attainment (Teixeira and Queirós, 2016), annual attainment data for 200 years were unavailable. Consequently, estimates of women's university enrolment were used to measure sex-specific university-based human capital. ...
The growing presence of women in the Norwegian state and military heralds an epoch-making, worldwide transformation. A key challenge is to explain why institutions which excluded women for more than a millennium no longer promote all-male membership. This tectonic shift is investigated with a data-based synthetical methodology. Multidisciplinary evidence going back five thousand years is combined with a graphical analysis of two centuries of time series data. The guiding theory is that historical pathways for cultural information flow have coevolutionary spatial and energetic sociodynamics. Accordingly, women’s exclusion from warfare and politics in agrarian-era Norway coevolved with three interconnected constraints: oral communication, dependence on musculoskeletal energy, and the spatial limitations of person-to-person contact. The contemporary relaxation of such constraints is investigated using two centuries of data culled from Norway’s statistical yearbooks. These data show that women’s entry into Norway’s national legislature, pushed by women’s organizations, roughly coevolved with literacy-based communication and education, industrial-era extrasomatic energy, and distance-closing motorization. Multidisciplinary evidence also indicates that women’s military and political careers were spatiotemporally handicapped by inflexible work hours and worksites far from childrearing locations. The Norwegian military prioritized physical endurance rather than the competencies that women would later bring to a 21st-century rapid reaction force. Today, with new information pathways forming, the digitalized knowledge economy is reversing the human-capital advantage of men compared to women. Instantaneous information exchange and high-tech energetics are reducing spatiotemporal barriers via remote work. Cross-disciplinary and time-series evidence suggest that these digital-age dynamics contribute to a more gender-neutral state and military.
... Higher education improves the scientific and cultural level of educated people, thus promoting the development of scientific research, technical services, and high-tech industries (Liu et al., 2024;. Second, higher education promotes the upgrading of industrial structure by enhancing human capital (Teixeira and Queirós, 2016;Bai et al., 2020). The development of higher education can cultivate more professional talents and optimize the structure of the labor force so that the industrial sector can obtain higher comprehensive quality and promote the upgrading of the industrial structure (Mukhuty et al., 2022). ...
Based on the sample data of 63 higher education institutions in Chongqing from 2013 to 2022, this paper adopts the entropy value method and the coupling coordination degree evaluation model to measure the coupling coordination degree and coupling mechanism between higher education and industrial economy in Chongqing. The results of the study found that: (1) the level of higher education in Chongqing shows a trend of rapid growth followed by basic stability and slight decline during the sample period, with the public undergraduate > the public specialized > the private undergraduate > the private specialized, and the central urban area > the new area of the city proper > the two clusters. Meanwhile, the level of industrial economy and its three subsystems in Chongqing also showed an upward trend, in which industrial efficiency > industrial scale > industrial structure. (2) The coupling coordination degree between higher education and industrial economy in Chongqing is at a medium level, with a phenomenon of high constant high and low constant low. It is characterized by an olive-shaped structure with fewer areas at the two ends, more areas in the middle for the quantity distribution, and one area higher than two clusters for the geospatial distribution. (3) There is a mutual promoting effect between higher education and industrial economy in Chongqing. The development of higher education, industrial economy, industrial efficiency, industrial scale, and industrial structure can improve the coupling coordination degree. Except for the industrial scale, other variables have a positive moderating effect on the coupling coordination degree. In addition, the heterogeneity analysis shows that the positive effect of higher education on the coupling coordination degree is higher in private institutions, undergraduate institutions, two clusters, and new area of the city proper.
... In addition, human capital provides added value to the company every day, through motivation, commitment, competence, and effectiveness of teamwork. An added value that can be contributed by workers in the form of developing competencies owned by the company, transferring knowledge from workers to the company, and changing management culture (Ahmed & Wang, 2019;Tan, 2014;Teixeira & Queirós, 2016). ...
The phenomenon of heightened competition in the tourism industry, particularly in West Java, underscores the necessity for star-rated hotels to enhance their competitive advantages. This study aims to investigate the interrelationships among market orientation, human capital, service quality, and competitive advantage within the hospitality sector. Using a quantitative approach, survey research design, and explanatory research objectives, involving hotel guests in West Java. A total of 325 participants were surveyed, yielding 316 valid responses for analysis using Structural Equation Modeling (SEM). The findings indicate that both effective market orientation and quality human capital significantly influence service quality in the hotel industry, both independently and collectively. Moreover, the study demonstrates that market orientation and human capital exert their maximum impact on competitive advantage through improvements in service quality. These insights contribute to theoretical understanding and practical applications in the hospitality sector, emphasizing the need for hotel management to prioritize the development of market orientation and human capital to optimize service quality and, ultimately, competitive advantage. Recommendations include implementing targeted training programs for staff and adopting strategies that align with customer expectations to foster sustained growth and competitiveness in the industry. By addressing these factors, star-rated hotels in West Java can better position themselves in an increasingly competitive landscape.
... This continuous investment in human capital is closely linked to higher levels of employment in science and technology sectors. Regions with a greater proportion of their workforce engaged in these high value-added sectors tend to experience faster economic growth and higher GDP levels (Teixeira & Queirós, 2016). This is because employment in these sectors directly contributes to innovation, technological progress and overall economic competitiveness of regions (Porter, 2003). ...
The labour market is a key driver of regional economic outcomes, with factors such as unemployment, labour productivity and workforce composition shaping prosperity. High unemployment often reflects inefficiencies in resource allocation, leading to reduced productivity and consumer spending, while investments in human capital and productivity drive innovation, competitiveness, and growth. This study analyses the impact of labour market conditions and demographics on economic performance across EU-27 regions over two decades. Using quantile regression models, the research highlights the varying effects of workforce dynamics across regions at different stages of development. The findings reveal that unemployment disproportionately impacts low- and middle-income regions, while investments in lifelong learning yield significant returns in less developed regions. Labour productivity is a key driver, with employment in science and technology sectors particularly influential in wealthier regions. Additionally, demographic factors such as population density and changes in population size play
significant roles in shaping economic outcomes. The study highlights the need for region-specific policies that address disparities, promote education and innovation in less developed areas, and balance wage growth with productivity in wealthier regions to foster sustainable growth and EU-wide convergence.
... problem might well be further affected by bias due to the omission of certain variables and the persistence of measurement errors, as specified by Teixeira and Queirós (2016). Second, the GMM stands as an effective tool fit for simultaneously attenuating both the heteroscedasticity and autocorrelation problems, as maintained by David et al. (2006). ...
The aim of this study has been to assess the impact of foreign direct investment, energy consumption, income, renewable energy, trade openness, and population size on carbon emissions in a panel of nineteen Asian countries, observed over the period ranging from 1990 to 2020, approached via GMM technique. Additionally, for the purpose of estimating our dynamic panel data model, we considered applying the OLS, fixed, and random effects techniques for static panels. Noteworthy, also, is that we have undertaken to examine this relationship with respect to three sub-group sets, categorized according to income levels, namely, high-income, middle-income, and low-income countries. On applying the dynamic model, it turned out that GDP per capita, energy consumption level, usage of renewable energy, and population size ended up displaying a significant and positive effect on the rates of CO2 emission in regard to the three subgroups under review. Similarly, the GDP square coefficient ended up exhibiting an unfavorable effect on the environmental quality dimension. As to FDI, the impact was predominantly positive and significant at the threshold of 1% regarding the high-income and middle-income countries. As regards the low-income countries’ subgroup, however, the FDI’s effect turned out to be significant, still within a lower level, i.e., at a 10% threshold. Such a result should indicate that economically weaker Asian countries might be liable to release lower CO2 emission rates with respect to their wealthier counterparts, owing mainly to restricted industrialization scopes.
... The countries in this quadrant indicate the absence and full eco-economic returns from a sufficiently high level of human capital. For these countries, a significant problem is the involvement of highly educated people in the production system [14]. The reasons for the inhibition of the transformation of human capital into economic growth are that Iran has been under sanctions for more than 40 years, for China a certain problem is to overcome the regional bias in the provision of higher education and strengthening the link between science and education and production [15]. ...
It is of great importance to recognize the potential of humanity at the national level and to strive to realize it in order to achieve sustainable development goals. The paper attempts to shed light on the features of human potential and human capital in BRICS countries through the lens of sustainable development goals. Furthermore, it illustrates the interconnection between human capital and economic growth. The Human Potential Index (HDI) and Human Capital Index (HCI) are presented as key indicators of human capital development and human potential in BRICS countries. We would like to respectfully propose a potential link between these indices and sustainable development goals. The research is based on an analysis of the relationship between the HDI and HCI, as well as the HCI and GDP (PPP) of the BRICS countries in 2024, with a view to identifying potential areas for further investigation. The results of the analysis indicate a high correlation between the level of development of human potential and human capital, with a Pearson correlation coefficient of 0.84 for the HDI and HCI of BRICS countries. The analysis, which is based on the con-struction of a positioning map, has allowed us to propose a tentative division of the BRICS countries into three groups. It would be fair to say that three countries (UAE, Saudi Arabia and Russia) are in a relatively privileged position in terms of their NSI and GDP (PPP) per capita. The group of countries with relatively low GDP (PPP) per capita and high HCI includes two countries: China and Iran. The group with low levels of both HCI and GDP (PPP) per capita includes the remaining five BRICS countries. The presented cross-country analysis could potentially serve as a tool for identifying potential avenues for human capital development, economic growth, and inter-country cooperation of the BRICS countries in the context of achieving sustainable development goals.
... This positive coefficient signifies that enhancing human capital advances common prosperity. The improvement of human capital enhances individuals' skills and knowledge, enabling them to contribute more effectively in diverse industries and fields, thereby fostering economic development (Amendola et al. 2020;Teixeira and Queirós, 2016). A higher labor participation rate signifies increased engagement in economic activities, consequently stimulating economic growth. ...
Air pollution has emerged as a profoundly critical global environmental issue, primarily due to its adverse effects on human health and its impediment to national development. We investigate the spatial and heterogeneous impacts of air pollution on common prosperity across 295 cities in China from 2006 to 2020, using the spatial Durbin model. Moreover, our research explores the mediating effect of air pollution on common prosperity. The research results are summarized as follows: Firstly, there has been a distinct upward trend in China’s common prosperity in recent years. Secondly, air pollution significantly hinders common prosperity, and this impact shows a spatial spillover effect. Specifically, it not only affects the local realization of common prosperity but also has a detrimental effect on that of neighboring cities. Thirdly, heterogeneity analysis indicates that air pollution adversely affects the common prosperity of neighboring cities only in high-common-prosperity and high-air-pollution groups. Fourthly, air pollution hinders common prosperity by reducing the availability of human capital. This article offers a novel perspective on achieving common prosperity.
... The quality and health of environmental subsystem directly influence the quality of life and livability of the residents within the social subsystem. Meanwhile, the social subsystem can enhance residents' environmental awareness to improve environmental quality [42], but it is also necessary to acknowledge that it can contribute to domestic pollution discharged into the environmental subsystem. ...
Enhancing energy efficiency (EE) is a crucial strategy for fostering sustainable development through the alignment of economic growth, energy conservation, emission mitigation, and social welfare improvement. It is widely recognized as the most accessible, secure, and cost-effective means of advancing sustainable development. However, many developing economies still exhibit remarkably low levels of EE, resulting in significant disparities compared to their developed counterparts. These disparities pose challenges to the realization of the United Nations' sustainable development goals (SDGs). In response to the limitations of extant EE definitions, our study proposes a redefined concept of EE within the sustainable development framework. Subsequently, we utilize the super-efficiency SBM-DEA model to assess the EE of 168 economies globally from 2000 to 2017, offering a detailed examination centered on spatiotemporal patterns and inequality. Key findings include: (1) Global EE initially displayed an upward trajectory, followed by a decline, with a persistent decrease post-2009; the impact of global financial crisis on EE varies across income groups of economies. (2) Spatially, EE exhibits a notable geographical clustering effect, with regions displaying distinct concentrations of high and low EE throughout the study period. (3) While global EE inequality has generally diminished, disparities within income groups have become the dominant source of EE inequality. Our research elucidates the intricate dynamics of global EE and underscores its integral role in the pursuit of sustainable development.
This study investigates the context-dependent mediating role of innovation in the relationship between the three primary firm capabilities (absorptive capacity, export orientation, and sustainable practices) and financial performance via a mixed method that combines classical meta-analysis with meta-analytic structural equation modelling. Our analysis of 555 effect sizes from 280 distinct samples published from 2001 to 2022 supports the dynamic capabilities perspective by revealing a nuanced connection between firm capabilities, innovation, and financial performance. The classical meta-analysis identifies statistically significant positive associations among the three firm capabilities, innovation, and financial performance. Grounded in three well-established theoretical lenses – Resource-based View, Exogenous Growth Theory, and Stakeholder Theory, our meta-analytic structural equation modelling results indicate that innovation mediates the positive effects of absorptive capacity, export orientation, and sustainable practices on financial performance. Effect size estimates are quite different according to three subgroups: innovation type (conventional vs. eco-innovation), industry type (knowledge/technology-intensive vs. labour-intensive industries), and country type (developed vs. developing countries), highlighting innovation’s context-dependent role in linking firm resources/capabilities with financial outcomes. Our results indicate that innovation’s mediating effect is especially prominent in knowledge- and technology-intensive industries and in developing economies, and internal capabilities, such as absorptive capacity and knowledge assimilation, are more critical to innovation and financial performance than external market exposure.
Resource accumulation has been identified, with technological change, as a major explanatory factor of economic growth convergence. At the same time, resource capacity may act as a growth limiting factor. Under-investment may have a moderator effect on the economic growth convergence process, while path-dependencies may be observed. Using a tailored non-parametric model and a unique sample of 92 countries all around the world for the 1965–2019 period, we study the role of resource capacity from a new angle. First, we measure potential countries’ under-investment. Next, we quantify its role in the economic growth convergence process. Our findings reveal that under-investment exists and that it represents a brake on economic growth convergence. However, such an effect can be counterbalanced by promoting technological advances or creating a more favourable resource environment. Finally, we run several sensitivity tests to assess the robustness of our findings.
This chapter focused the discussion on the various benefits of human capital to individual persons and groups. The outcomes of human capital have been presented through the multidisciplinary lenses of human resource (HR) management, strategy and strategic management, and economics. Human capital increases wages and earning potentials of individuals and increases the performance of business firms and all forms of organizations. In formal organizations, HR practices constitute a form of institutions that guide the management of people with human capital to ensure that the knowledge, skills, abilities, and other characteristics they possess are utilized for the optimum productivity of their organizations. Societies also benefit from the accumulation of human capital by persons. Although human capital outcomes are sometimes direct, they are more complex in societies simply because societies are multifaceted. This chapter concludes with the “micro–macro paradox” on the returns to human capital and introduces the Human Capital Returns Matrix.
While the role of education in fostering social stability and increasing a country’s human capital is well recognised, there are debates on policies and institutional arrangements in this regard. In particular, parents’ choice of schools appears to be a critical issue as it can influence both educational outcomes and inclusiveness. Given that there is a broader homogeneity in infrastructure facilities available at both household and school levels, one would expect that household-related factors will influence the choice of schooling of children. This article examines such household-level factors that influence households’ choice of schools for children in selected areas of Kottayam District, Kerala. A primary survey was conducted in December 2021 comprising 300 households. Based on the results of the estimated binary logit and probit models, this article reports that the choice of school for children is significantly influenced by households’ ethnic background and economic status, and sex, education, and primary occupation of the family head. There is a higher likelihood of choosing public schools by households from the Scheduled Caste/Scheduled Tribe category, those living below the poverty line, or those with agriculture as the primary occupation. On the contrary, this likelihood is less for households with educated and male heads. However, the choice of school for children does not differ significantly between rural and urban households. Further, there is no gender inequality in choosing schools. The findings suggest that future government policies should emphasise infrastructure development and quality improvement in government schools to promote socio-economic inclusion in education.
This study investigates the impact of human capital in the context of health and education on Indonesia's economic growth, which includes physical capital investment and trade openness as control variables. Using time series data from 1981 to 2022 and employing econometric techniques by applying the ARDL model. The findings reveal that education, investment, and trade openness have a positive and statistically significant impact on Indonesia's economic growth. Surprisingly, life expectancy has a negative and significant impact on Indonesia's economic growth. This unexpected result warrants further investigation to identify potential confounding factors or data limitations. Despite this finding, the study emphasizes the crucial role of health in human capital and long-run economic prosperity. Among the policy suggestions are enhancing nutrition, guaranteeing access to high-quality healthcare, and maximizing health transformation through the development of public health services. Concurrently, investments in education, particularly in improving quality, accessibility, and alignment with labor market demands, are essential. These findings underscore the need for a comprehensive approach to economic development that prioritizes human capital development while addressing the complexities of health-growth relationships.
This research aims to analyze the influence of human resources and natural disasters on Indonesia's economic growth. Using annual time series data starting from 2008-2022 with multiple linear regression methods and autoregressive distributed lag (ARDL) models. This study reveals that there is no cointegration relationship between economic growth and human development indices and natural disasters. Both in the short and long term, human resources as measured using the human development index have a negative effect in the short and long term. Likewise, natural disasters which are measured using the number of natural disaster evacuees have a negative effect in both the short and long term on Indonesia's economic growth. These findings have implications that solutions to increase economic growth can be realized through economic development policies, ensuring investment in education and human development is right on target and developing disaster emergency response plans and building disaster-resistant infrastructure.
Finansal dolarizasyon, ülkedeki yerleşiklerin varlık ve yükümlülüklerini yabancı para birimi cinsinden tutmaları olarak tanımlanmaktadır. Gelişmekte olan ülkelerde yaşanan yüksek enflasyon, döviz kurundaki dalgalanmalar ve belirsizlik ekonomik birimlerin yabancı para birimi cinsinden varlıklara ve yükümlülüklere yönelmesine yol açarak ulusal para birimini ve ekonomiyi olumsuz etkilemektedir. Bu olumsuzluktan reel sektörde faaliyet gösteren firmaların yatırımları etkilenmektedir. İktisadi literatürde döviz kurlarındaki değişimin firma bilançoları üzerinde oluşturduğu etki ve buna bağlı olarak yatırımlarda ortaya çıkan değişim “bilanço etkisi” olarak bilinmektedir. Bu çalışmada,Türkiye’de 2010-2021 döneminde BİST imalat sanayi sektöründe faaliyet gösteren firmalar için finansal dolarizasyonun yatırımlar üzerindeki etkisi bilanço etkisi bağlamında dinamik panel veri yöntemlerinden GMM yöntemi ile analiz edilmiştir. Ardından değişkenler arasındaki ilişki Juodis Karavias ve Sarafidis (JKS) tarafından geliştirilen panel nedensellik testi ile incelenmiştir. Bağımlı değişkenin firma yatırımları olduğu ekonometrik modelde bağımsız değişken olarak firmaya özgü mikroekonomik veriler ile ekonomik etkilere sahip makroekonomik veriler yer almaktadır. Çalışmadan elde edilen ampirik bulgulardan yola çıkıldığında üç temel sonuca ulaşılmıştır: i) yatırımlar hem mikro hem de makro ekonomik değişkenlerden etkilenmektedir, ii) finansal dolarizasyon Türkiye ekonomisinde yatırımları etkilemektedir. Şöyle ki, yabancı para varlıklarındaki artış yatırımları pozitif etkilerken yabancı para borçlarındaki artış yatırımları negatif olarak etkilemektedir, iii) Türkiye ekonomisinde bilanço etkisi geçerlidir. Yabancı para borcu olan şirketlerin yatırımları reel kur arttıkça azalmaktadır.
Günümüzde küresel ekonomilerin kalkınma anlayışının ana odak noktası sürdürülebilirlik kavramıdır. Bu anlayış ile ekonomik çıktılar, çevresel ve sosyal boyutlarıyla birlikte değerlendirilmektedir. Daha açık bir ifade ile, bu yaklaşım salt ekonomik çıktılara odaklanmaktan ziyade çevresel ve toplumsal faydaların da öncelendiği bir çerçeve sunmaktadır. Bu durum politika yapıcılara ekonomi ve çevre arasındaki çelişkide dengeyi sağlamaya yönelik sorumluluklar yüklemektedir. Bu çalışma, insani gelişme ile yenilenebilir enerji tüketiminin çevresel sürdürülebilirlik üzerindeki etkisini Türkiye ekonomisi için değerlendirmektedir. Ampirik analiz yöntemi olarak ARDL sınır testi yaklaşımının kullanıldığı çalışmanın veri aralığı 1990-2020 dönemidir. Çalışmanın amacı doğrultusunda ekolojik ayak izi, insani gelişme endeksi, yenilenebilir enerji tüketimi ve sanayileşme değişkenleri analize dahil edilmiştir. Analizlerden elde edilen bulgular, uzun dönemde insani gelişmenin ekolojik ayak izini azaltarak çevresel sürdürülebilirliği desteklediğini göstermektedir. Bunun yanı sıra bulgular, yenilenebilir enerji tüketiminin ekolojik ayak izi üzerine kısa ve uzun dönemli etkisinin negatif olduğunu ortaya koymaktadır. Öte yandan çalışma bulguları, uzun dönemde sanayileşmenin Türkiye’de çevresel sürdürülebilirliği olumsuz yönde etkilediğine işaret etmektedir.
Purpose
The purpose of the study is to investigate the impact of artificial intelligence (AI), machine learning (ML), and data science (DS) on unemployment rates across ten high-income economies from 2015 to 2023.
Design/methodology/approach
This study takes a unique approach by employing a dynamic panel data (DPD) model with a generalised method of moments (GMM) estimator to address potential biases. The methodology includes extensive validation through Sargan, Hansen, and Arellano-Bond tests, ensuring the robustness of the results and adding a novel perspective to the field of AI and unemployment dynamics.
Findings
The study’s findings are paramount, challenging prevailing concerns in AI, ML, and DS, demonstrating an insignificant impact on unemployment and contradicting common fears of job loss due to these technologies. The analysis also reveals a positive correlation (0.298) between larger government size and higher unemployment, suggesting bureaucratic inefficiencies that may hinder job growth. Conversely, a negative correlation (−0.201) between increased labour productivity and unemployment suggests that technological advancements can promote job creation by enhancing efficiency. These results refute the notion that technology inherently leads to job losses, positioning AI and related technologies as drivers of innovation and expansion within the labour market.
Research limitations/implications
The study’s findings suggest a promising outlook, positioning AI as a catalyst for the expansion and metamorphosis of employment rather than solely a catalyst for automation and job displacement. This insight presents a significant opportunity for AI and related technologies to improve labour markets and strategically mitigate unemployment. To harness the benefits of technological progress effectively, authorities and enterprises must carefully evaluate the balance between government spending and its impact on unemployment. This proposed strategy can potentially reinvent governmental initiatives and stimulate investment in AI, thereby bolstering economic and labour market reliability.
Originality/value
The results provide significant perspectives for policymakers and direct further investigations on the influence of AI on labour markets. The analysis results contradict the common belief of technology job loss. The study’s results are shown to be reliable by the Sargan, Hansen, and Arellano-Bond tests. It adds to the discussion on the role of AI in the future of work, proposing a detailed effect of AI on employment and promoting a strategic method for integrating AI into the labour market.
This thesis is a compilation of eight published works on English-medium instruction (EMI) at the tertiary level, accompanied by a commentary that synthesises the findings and discussions from these works. Over the past three decades, research on EMI at the tertiary level has advanced significantly. However, much of the focus remains on problem identification, particularly in three areas: English language issues, pedagogical and professional learning challenges, and stakeholder perceptions of EMI. The increasing volume of such research suggests the field has reached a saturation point, indicating a need for a new approach focused on problem-solving (Han, 2023; Macaro & Akıncıoğlu, 2018). Notably, the existing literature lacks research and discussion on solution models that address ongoing challenges, particularly in relation to the professionalisation of EMI and improving students' learning outcomes.
To address this gap, this thesis draws on Critical EMI, grounded in critical social theory (CST) and socio-cultural theory (SCT), to present and analyse eight of my published works in response to the central research question: What does research on multidisciplinary teacher collaboration and student perception suggest for the professionalisation of EMI at the tertiary level? These works share a coherent theme related to the professionalisation of EMI, with particular emphasis on students' academic outcomes, motivation, interdisciplinary teacher collaboration, and the professional development of EMI content-teachers. The works include one report (Dearden et al., 2015), four research articles (Dearden et al., 2016; Macaro & Akıncıoğlu, 2018; Macaro et al., 2020; Akıncıoğlu, 2024), two book chapters (Akıncıoğlu & Lin, 2021; Akıncıoğlu, 2022), and one conceptual article (Akıncıoğlu, 2023), all published by internationally recognised, peer-reviewed outlets.
Five of these published works (one report and four research papers) utilise data collected from the EMI Oxford Project, a mixed-methods research initiative conducted at Oxford University between 2014 and 2017. The first sub-project was a qualitative inquiry into interdisciplinary teacher collaboration in Turkish EMI universities, using data from pre- and post-intervention semi-structured interviews (Dearden et al., 2015; Macaro et al., 2016) and audio recordings of collaborative lesson planning (Akıncıoğlu, 2024). The second sub-project employed a quantitative approach, investigating the impact of variables such as year group, gender, and university type on Turkish students’ perceptions of EMI. The third sub-project focused on EMI teacher perspectives on professional development and certification through online surveys (Dearden et al., 2015; Macaro & Akıncıoğlu, 2018; Macaro et al., 2020).
The commentary synthesises qualitative and quantitative findings from these eight published works interpretively (Noblit & Hare, 1988), applying perspectives from Critical EMI, CST, and SCT to categorise major insights and introduce a solution-oriented guiding model for addressing EMI professionalisation challenges—the EMI Professionalisation Framework (EMI ProF). To achieve this, Miles and Huberman’s (1994) coding procedures (data reduction, data display, and conclusion drawing/verification) were employed to extract themes from the qualitative and quantitative data of one report and four research articles. Additionally, narrative literature review techniques (Grant & Booth, 2009) were utilised to summarise and critically interpret the findings of one conceptual article and two chapters, facilitating thematic analysis and the discussion of emerging trends.
Reflecting on these findings, this thesis advocates for the professionalisation of EMI at the tertiary level to strengthen interdisciplinary teacher collaboration, improve students' academic content learning and motivation, and certify and recognise the competencies of EMI content-teachers. As a result, two frameworks are proposed: (1) a theoretical framework for EMI professionalisation, grounded in Freidson’s (2001) definition of professionalism, Evetts’ (2009) sources of professionalism, and Solbrekke and Englund’s (2011) concepts of professional responsibility and accountability; and (2) the EMI Professionalisation Framework (EMI ProF), a quality management programme for universities, designed to be implemented through institutional innovation projects. By prioritising strategic decision-making, quality assurance, sustainability, and improved learning outcomes in EMI programmes, this thesis makes an original contribution to the field through the EMI ProF. However, it is important to note that the EMI ProF should be viewed as a guiding model to stimulate further research and inquiry into professionalisation, rather than as a complete framework offering a definitive solution.
Lastly, the thesis calls for future research to focus on the implementation and refinement of models like the EMI ProF, given the global expansion of EMI and the pressing need for standardisation and quality management to ensure its effectiveness and sustainability.
Commodity dependence constitutes an economy with primary goods dominating its export structure. It can promote economic diversification and improve societal well-being if managed considerably. However, the fluctuating global commodity prices can lead to economic instability, potentially causing widespread poverty and vulnerability among the population. While commodity-dependent countries have increased, some have transitioned to commodity independence in the past decade. Nevertheless, little is known about changes in economic development indicators for these countries compared to those still reliant on commodities. This study examines how commodity dependence relates to income inequality, economic growth, and human development indicators. Using the panel-corrected standard error, fixed effect, and two-step system generalized method of moments, results indicate that commodity dependence is inversely related to income inequality and economic growth but positively related to human development. Institutional quality also matters, with better institutions linked to lower inequality and higher economic growth and human development levels. This suggests that while commodity dependence can impede economic development, better institutional quality could help manage the benefits of commodity exports while mitigating their developmental costs.
JEL Classification F14, F43, O11, O15, O40
This study explores the impact of oil resource abundance on industrial structure in 57 oil-exporting countries within the Belt and Road Initiative (BRI) from 1990 to 2020. Using the System Generalized Method of Moments (SYS-GMM) models, the research highlights a negative correlation between oil exports and industrial structure dimensions. Countries such as Algeria, Angola, Azerbaijan, Chad, Congo, Iraq, and Libya are particularly affected by the resource curse, facing slower industrial development, while China, Lithuania, Malaysia, and New Zealand demonstrate resilience and positive industrial outcomes. The study also shows that oil abundance influences foreign direct investment (FDI), though this influx does not consistently translate into industrial growth. Policymakers are advised to implement strategies that balance oil revenue management, promote industrial diversification, and align education spending with industry needs. Trade openness is also emphasized as key to fostering industrial progress. These findings offer critical guidance for addressing the resource curse and achieving long-term sustainable industrial growth.
Which structural reforms stimulate labor productivity growth in developing countries? This study examines this question by applying the local projections method of Jordà (2005) to a sample of 35 developing countries over the period 1990–2014. Our results show that financial, trade, and product market reforms contribute significantly to labor productivity growth. These findings remain robust across various methods, including local projections with inverse probability weighted regression adjustment (LP-IPWRA), instrumental variables (IV), and alternative specifications. The analysis of transmission channels suggests that these reforms primarily foster within-sector productivity growth by enhancing dynamic, productive, and allocative efficiency. However, we do not find robust statistical evidence that these reforms directly promote structural change. Our findings highlight the crucial importance of human capital for effective labor reallocation across sectors—a key driver of structural change. Finally, the study underscores the significant productivity gains from appropriate sequencing and complementarity between reforms, suggesting the value of a sequential approach in implementing structural reform policies.
Purpose
This study aims to deepen our understanding of how conventional technologies and robust accounting education standards can impact the effectiveness of green accounting practices in enhancing firm performance. To achieve this, the paper explores the moderating effects of artificial intelligence (AI) and accounting education quality on the relationship between green accounting and firm performance.
Design/methodology/approach
Using generalized method of moments estimation, this research uses a comprehensive dataset comprising 32,680 firm-year observations of listed companies from ten prominent countries – Canada, the UK, the USA, China, France, Germany, India, Japan, South Korea and Italy – over the period from 2012 to 2022. These countries, selected based on their high gross domestic product rankings as reported by the International Monetary Fund, ensure a diverse representation of economic strengths and capture a wide range of green accounting practices.
Findings
The study shows that green accounting practices positively impact current firm performance. Country-level AI positively moderates this relationship, suggesting that advanced AI infrastructure enhances the benefits of green accounting through improved data accuracy and decision-making. However, country-level accountancy education quality negatively moderates the relationship, indicating that stringent implementation of green accounting standards in these regions may introduce complexities and costs that reduce firm performance.
Practical implications
Integrating AI enhances data processing, predictive analytics and decision-making, improving green accounting effectiveness. High-quality accounting education ensures accurate reporting and greater transparency. These insights, when applied, can empower businesses to optimize sustainability strategies, assist policymakers in developing targeted regulations and guide educators in preparing accountants for the evolving demands of green accounting.
Originality/value
To the best of the authors’ knowledge, this study is the first to explore the combined moderating effects of AI and accounting education quality on the relationship between green accounting and firm performance. By highlighting the synergistic role of digital innovation and robust educational standards, this research offers novel insights into how these factors can enhance the effectiveness of green accounting practices and improve financial outcomes.
In this paper the exploration of the interactionmechanisms between the evolution of demand and the overall process of differentiation of the economic system is pursued in a twofold way: (i) the question is asked whether demand indeed saturates and whether such saturation is required for an ongoing economic development; (ii) the impact of the income distribution on the evolution of demand and thus on economic development is investigated. To study the existence and impact of demand saturation, Engel curves are calculated under
different conditions. To study the impact of income distribution, TEVECON distinguishes within the population of the economic system two social classes, which differ in their level and quality of education, and thus for their human capital and wages.
In this article, we propose an integrated view of the mechanisms supporting the Schumpeterian “engine of progress.” We investigate—at
the industry level—the interconnections between three key relationships shaping the dynamics of innovation and economic performance:
first, the ability of industries’ R&D efforts to turn out successful innovations; second, the ability of innovations to lead
to high entrepreneurial profits; and third, the commitment of industries to invest profits in further technological efforts.
We build a simultaneous three-equation model exploring the determinants of industries’ R&D intensities, innovative turnover,
and profit growth, highlighting the complexity of relationships, reciprocal influences, and feedback loops. The model is empirically
tested at the industry level—for 38 manufacturing and service sectors—on 8 European countries for two periods from 1994 to
2006. The results show that the model effectively accounts for the dynamics of R&D, innovation, and profits of European industries.
Using a dynamic panel data model and the system GMM, this article examines the relationship between urban–rural income polarization and economic growth at the provincial level in the period 1995 to 2010 in China. The estimated results and significant tests indicate that a certain degree of urban–rural income polarization is beneficial to economic growth at the provincial level in both stages for China as a whole, though the contribution of urban–rural income polarization to economic growth is relatively small. Aggravating urban–rural income polarization has a negative impact on economic growth in China. Based on a cluster analysis of regional economic growth at the provincial level, the authors carried out the same analysis separately for two categories of regions too. The results for those two categories of regions show that positive correlations also exist between urban–rural income polarization and economic growth in both stages, which are very similar to the analysis for the whole of China. In addition, a meaningful finding can be derived that the contribution of consumption growth rate to economic growth rate in the second stage is smaller than that in the first stage obviously.
The aim of this article is to propose a new database allowing a comparative evaluation of the relative performance of schooling systems around the world. We measure this performance through pupils’ achievement in standardized tests. We merge all existing regional and international student achievement tests by using a specific methodology. When compared with other existing databases, our approach innovates in several ways, especially by including regional student achievement tests and intertemporal comparable indicators. We provide a data set of indicators of quality of student achievement for 103 countries/areas in primary education and 111 countries/areas in secondary education between 1965 and 2010.
In this paper we revisit the institutions–growth nexus in developing countries including the East Asian region. The region has in the past three decades not only achieved spectacular economic growth, but also experienced one of the worst financial crises, i.e. Asian financial crisis (AFC) in 1997–1998. Utilising the neoclassical growth framework augmented with institutional controls and latest estimation technique in panel data analysis, this study finds evidence of positive institutions effect on growth. Nonetheless, the evidence is limited to security of property rights only with no similar evidence on efficient bureaucracy and strong government. This study also uncovers the channel of the institutional effects on economic growth, i.e. via total factors productivity. This study adds to the literature of East Asian growth, which hitherto, to the best of our knowledge, has seen only two studies, namely Rodrik (1997)32.
Rodrik, D. (1997). TFPG controversies, institutions, and economic performance in East Asia. National Bureau of Economic Research working paper no. 5914. Cambridge, MA: National Bureau of Economic Research.View all references ‘TFPG controversies, institutions, and economic performance in East Asia’ and Campos and Nugent (1999)10.
Campos, N.F., & Nugent, J.B. (1999). Development performance and the institutions of governance: Evidence from East Asia and Latin America. World Development, 27(3), 439–452.[CrossRef], [Web of Science ®], [CSA]View all references ‘Development performance and the institutions of governance: Evidence from East Asia and Latin America’ that document the evidence of institutional importance on economic growth, and these studies are however for the period before the AFC.
This study empirically explores the growth effects of rent seeking activity (RSA) for a group of 52 developing/transitional countries, using a dynamic panel data approach. The modeling framework is a Mankiw–Romer–Weil (MRW) conditional convergence model with path dependence and augmented by measures of the opportunities for RSA, namely indices for the extent of democracy and corruption control. The empirical analysis suggests that, for this group of countries, RSA retards economic growth, in that (i) democratic institutions — which are inimical to RSA, are growth enhancing and (ii) reduction in the extent of corruption is growth-enhancing if supported by well-developed democratic institutions. We find also that health is more relevant than educational participation as a measure of human capital development, that path dependence is absent where democracy is weak, and that the MRW model characterizes the growth process more successfully in the stronger democracies.
We assess the fiscal composition-growth nexus, using a large country panel, accounting for the usually encountered econometric pitfalls. Our results show that revenues have no significant impact on growth whereas expenditures have negative effects. The same is true for the OECD with the addition that government revenue has a negative impact on growth. From our results, taxes on income are not growth enhancing, as well as public wages, interest payments, subsidies and government consumption. Spending on education and health boosts growth; and there is weak evidence supporting causality running from expenditures and revenues to output.
Central and Eastern Europe is a region with widely divergent development paths. Up to WWII, these countries experienced comparable growth patterns. Yet, whereas Austria and West Germany remained part of the capitalist West and underwent periods of rapid growth, other countries, under state-socialist regimes, experienced on average far lower growth rates. The lack of data, however, often limits the possibilities of a detailed, quantitative analysis. In this paper, we use a new dataset on physical and human capital in seven Eastern and Central European countries for the period 1920-2006 to calculate the effect on economic growth. We analyse the effect of including the quality of education in human capital. This allows us to perform a growth accounting analysis with the several production factors for Central Europe between 1920 and the present. The difference in growth path across countries is partly explained by differences in efficiency.
Empirical economic research typically uses education as a proxy for human capital. However, research aimed at validating the inclusion of education measures in growth regressions has yet to reach a consensus, often finding that the sign and significance of education depends on the sample of observations or the specification of the model. The goal of this paper is to reconcile the conflicting empirical evidence and validate (or invalidate) the inclusion of education in international growth regressions by providing a rigorous and systematic search for significance of education. Using methods which are largely immune to model misspecification, we examine six of the most comprehensive education databases in an attempt to identify a robust empirical link between mean years of schooling and economic growth rates. Contrary to a few recent papers that have identified significant nonlinearities between education and growth, our results show that the inclusion of mean years of schooling in growth regressions is not warranted.
Most papers dealing with individual overeducation risks focus on labour supply characteristics and workers behaviour. On the other hand, only few studies consider labour demand characteristics and technological change. In this paper we analyse the influence of both demand and supply factors on educational mismatch in a set of ten European countries. Our hypothesis, confirmed by results obtained using ordered probit model with sample selection, is that demand factors generally play major role in reducing educational mismatch in technologically more advanced countries, whereas supply factors are more important in countries that are lagging behind in the international division of labour. At the same time, important cross-country and gender differences have been identified in the way the demand/supply factors operate. All this calls for the fine-tuning of policies aimed to tackle the problem of educational mismatch. Apparently, EPL does not appear neither to hinder technological development, nor increase overeducation.
Long term economic development is characterized not only by increasing efficiency of economic activities but also by qualitative change within industries and increasing variety concerning the existence of different industries. Traditional economic growth models do not cope with the complex amalgam of these three trajectories of economic development nor could comprise the interactions among them. Furthermore, economic development is not a process which is spurred by supply-side effects but driven by the co-evolutionary interplay of supply and demand side forces. With our TEVECON model we analyze economic development driven by efficiency and quality improvements together with structural change and the co-evolution between innovation and demand. The first part of the paper introduces to the basic model and some general results. The second part of the paper deals with policy experiments which are undertaken by comparing different numerically analyzed scenarios.
We investigate the export-growth relationship at disaggregate levels – disaggregation both at the country level and at the level of exports – focusing on the diversification and the composition of exports of countries. In a sample of 65 countries for the period 1965–2005 the dynamic panel estimation reveals that both diversification and composition of exports are important determinants of economic growth after controlling for the impacts of other variables like lagged income, investment, and infrastructure. There is a critical level of export concentration beyond which increasing export specialization leads to higher growth. Below this critical level, diversification of exports matters for gross domestic product (GDP) growth. Growth of high technology exports also contributes tothe output growth; the relationship becomes stronger for countries that have share of manufacturing exports in their total exports greater than the world average. These results are robust even when the dataset isclassified in four sub-panels based on the export-economic growth relationship.
We further examine the channels through which Foreign Direct Investment (FDI) develops the national productivity of host countries. We investigate whether FDI is an effective channel of technological transfer across borders and whether that technology transfer is bi-directional: from an investing country to a host country and vice versa. In particular, an analysis is provided of whether FDI helps channel more resources towards the promotion of education activities and hence augments economic growth indirectly through augmenting the host country's absorptive capacity. Also, the analysis uses a novel approach to take into account the possibility that physical distances can act as a barrier to economic and technological interactions amongst countries, by embedding a measure of geographical distance into two specific channels: international trade and FDI. Empirical results obtained all lend strong support to these hypotheses.
The ability to adjust to structural change is vital to economic development, and entries can be active participants in this process. This paper aims to shed some light on the relation between entrepreneurship and growth by arguing that entrepreneurial activity relates to growth via reallocation of factors across sectors. While the importance of entrepreneurship for the reallocation of factors is widely acknowledged, and economic growth may be accelerated by structural change, there is to date no empirical evidence as to the quantitative importance of this link. This study fills that gap. The historical framework is the accelerated economic transformation that occurred in industrialized countries during the mid 1970s, resulting in an increasing need to adjust. Based on German data from 1975 to 2002, evidence is presented that sectoral reallocations are an important means for transforming entrepreneurial activity into growth. To proxy changes in the local sectoral structure induced by entries, a set of similarity measures is introduced that quantifies the impact of new business formation on sectoral reallocations of local economic activity. These measures have in common that they measure the concordance of new entries’ sector affiliations with that of existing businesses or those that exit. Next, these measures are used to analyze the relationship between structural change induced by entrepreneurial activity and economic development. The empirical findings suggest that structural change induced by newly founded businesses is positively related to local growth, revealing one element of the complex relation between entrepreneurship and growth.
There is considerable empirical evidence that the variety of the most developed economic systems has considerably increased since the time of the industrial revolution. Although strongly suggested by empirical evidence, this growth in variety has not been confirmed by adequate measures. In this paper we start to explore the relationships between the export and import variety of OECD countries and their economic performance. Growth in variety raises an even more important problem: is variety of an economic system at a given time only an effect or also a determinant of economic development? Our claims are that (i) the variety of economic system has grown, and, (ii) has to grow in order to allow the further development of the system, find a considerable, even if not definitive, support in previous literature. In the paper we first present our expectations about the evolution of variety and about its role in economic development, then we describe the technique and data we used for our measurements and finally we describe our results.
The “difference” and “system” generalized method of moments (GMM) estimators for dynamic panel models are growing steadily in popularity. The estimators are designed for panels with short time dimensions (T), and by default they generate instruments sets whose number grows quadratically in T. The dangers associated with having many instruments relative to observations are documented in the applied literature. The instruments can overfit endogenous variables, failing to expunge their endogenous components and biasing coefficient estimates. Meanwhile they can vitiate the Hansen J test for joint validity of those instruments, as well as the difference-in-Sargan/Hansen test for subsets of instruments. The weakness of these specification tests is a particular concern for system GMM, whose distinctive instruments are only valid under a non-trivial assumption. Judging by current practice, many researchers do not fully appreciate that popular implementations of these estimators can by default generate results that simultaneously are invalid yet appear valid. The potential for type I errors—false positives—is therefore substantial, especially after amplification by publication bias. This paper explains the risks and illustrates them with reference to two early applications of the estimators to economic growth, Forbes (2000) on income inequality and Levine, Loayza, and Beck (LLB, 2000) on financial sector development. Endogenous causation proves hard to rule out in both papers. Going forward, for results from these GMM estimators to be credible, researchers must report the instrument count and aggressively test estimates and specification test results for robustness to reductions in that count.
Growth in this model is driven by technological change that arises from intentional investment decisions made by profit-maximizing agents. The distinguishing feature of the technology as an input is that it is neither a conventional good nor a public good; it is a nonrival, partially excludable good. Because of the nonconvexity introduced by a nonrival good, price-taking competition cannot be supported. Instead, the equilibrium is one with monopolistic competition. The main conclusions are that the stock of human capital determines the rate of growth, that too little human capital is devoted to research in equilibrium, that integration into world markets will increase growth rates, and that having a large population is not sufficient to generate growth.
Human capital is the stock of skills that the labor force possesses. The flow of these skills is forthcoming when the return to investment exceeds the cost (both direct and indirect). Returns to these skills are private in the sense that an individual’s productive capacity increases with more of them. But there are often externalities that increase the productive capacity of others when human capital is increased. This essay discusses these concepts historically and focuses on two major components of human capital: education and training, and health. The institutions that encourage human capital investment are discussed, as is the role of human capital in economic growth. The notion that the study of human capital is inherently historical is emphasized and defended.
We examine the contribution of human capital to economy-wide technological improvements through the two channels of innovation and imitation. We develop a theoretical model showing that skilled labor has a higher growth-enhancing effect closer to the technological frontier under the reasonable assumption that innovation is a relatively more skill-intensive activity than imitation. Also, we provide evidence in favor of this prediction using a panel dataset covering 19 OECD countries between 1960 and 2000 and explain why previous empirical research had found no positive relationship between initial schooling level and subsequent growth in rich countries.
The paper combines Baumol’s model of structural change with a model of aggregate demand growth in the Keynesian-Kaleckian tradition to predict the dynamics of aggregate employment. The model for the demand regime is estimated with – and Baumol’s model for the productivity regime is calibrated on – OECD data. The trajectory for employment predicted by the combination of the two models tracks the actual employment dynamics in the OECD over the period 1970-2010 remarkably well.
This paper examines the relative impact of economic freedom, civil liberties, and political rights on growth. A system of three simultaneous equations is used to unearth the channels through which these institutional dimensions affect economic growth. These include greater efficiency and enlarged investment in physical and human capital. The sample contains 79 countries and six periods covering the years from 1976 to 2005. The results show that the three dimensions of institutional quality are important for economic growth either through a better allocation of resources or, indirectly, through the stimulation of investment in physical and human capital.
We describe the theory and practice of real GDP comparisons across countries and over time. Version 8 of the Penn World Table expands on previous versions in three respects. First, in addition to comparisons of living standards using components of real GDP on the expenditure side, we provide a measure of productive capacity, called real GDP on the output side. Second, growth rates are benchmarked to multiple years of cross-country price data so they are less sensitive to new benchmark data. Third, data on capital stocks and productivity are (re) introduced. Applications including the Balassa-Samuelson effect and development accounting are discussed.
This paper surveys the literature which examines the effect of education on economic growth. Specifically, we apply meta-regression analysis to 57 studies with 989 estimates and show that there is substantial publication selection bias toward a positive impact of education on growth. Once we account for this, the genuine growth effect of education is not homogeneous across studies, but varies according to several factors. Specifically, it is attributed to differences in education measurement and study characteristics, mainly model specification as well as type of data used, and the quality of research outlets where studies are published, e.g., academic journals vs. working papers.
This paper constructs a cross-country measure of the quality of education using a novel approach based on international test scores data. The first main finding is that there are large differences in education quality - one year of schooling in the U.S. is equivalent to three or more years of schooling in a number of low-income countries. I incorporate the estimated series for schooling quality in an accounting framework calibrated using evidence on Mincerian returns. This leads to the second important finding, which is that the fraction of income differences explained by the model rises substantially when one includes education quality; the increase is around 22 percentage points.
The study examines the relationship between human capital and economic growth by using a cross sectional sample of 106 countries to calculate an average over the period 2002–08. Sensitivity analysis on the core model found that the results are robust in terms of inclusion of relevant variables. However, the returns of human capital vary with countries having different income levels. The study found that the low-income countries can get higher returns than the other countries in case of investing in human capital. The study also tested the hypotheses of unconditional and conditional income convergence across nations. The results indicate that human capital either resists income divergence across nations or supports convergence.
This paper contributes to the debate on the relationship between human capital, institutions, and economic growth. The paper first develops a micro-foundation model linking institutions to human capital. The advantage of our modeling strategy is that the human capital accumulation function is derived from an endogenous process. The theoretical model shows that improvements in the quality of institutions foster human capital accumulation, decrease income inequality and change the historical development path. The paper uses cross-country panel data from 1965 to 2005 to test some of the model's propositions and finds that deep structures or structural institutions – which are very persistent and rooted on the historical development path of an economy – affect long-term economic performance, while political institutions are uncorrelated with productivity and long-term economic growth. The empirical estimates also show that growth of physical and human capital – instead of levels – determines long-run economic growth.
Latin American economic development has been perceived as a puzzle. The region has trailed most other world regions over the past half century despite relatively high initial development and school attainment levels. This puzzle, however, can be resolved by considering educational achievement, a direct measure of human capital. We introduce a new, more inclusive achievement measure that comes from splicing regional achievement tests into worldwide tests. In growth regressions, the positive growth effect of educational achievement fully accounts for the poor growth performance of Latin American countries. These results are confirmed in a number of instrumental-variable specifications that exploit plausibly exogenous achievement variation stemming from historical and institutional determinants of educational achievement. Finally, a development accounting analysis finds that, once educational achievement is included, human capital can account for between half and two thirds of the income differences between Latin America and the rest of the world.
This paper examines long-term changes in the persistence of overeducation among individual workers, focusing on the relationship between the rate of those changes and the general economic situation. All analyses are based on data from the Polish Panel Survey (POLPAN) conducted throughout the post-communist transition period, 1988–2008. The results suggest that being in a job with too low educational requirements is stable through time and raises the probability of experiencing the same situation five years later. The incidence of overeducation increased in the studied period, most rapidly during recession. The youngest cohorts, workers aged 26–35 in 2008, faced a higher risk of persistent overqualification than other cohorts. These findings are consistent with Thurow's job competition theory, as well as Sattinger's job assignment model.
. The theory of economic growth takes little notice of what is happening on the demand side of the markets so that ever more
goods and services can be sold. In order to make progress, this paper revives a classical notion in economics, the concept
of wants, and re-casts it in terms of a behavioral theory. Hypotheses are discussed concerning the wants people pursue, the
changes in these wants, and the corresponding consumption knowledge. The implications derived focus on why, in spite of the
historically unique growth of per capita income in the modern economies, consumption has not been altogether satiated. In
the suggested explanation, increasing variety of consumption items offered in the markets and increasing specialization of
the consumers in their demand activities play a key role.
We exploit differences in European mortality rates to estimate the effect of institutions on economic performance. Europeans adopted very different colonization policies in different colonies, with different associated institutions. In places where Europeans faced high mortality rates, they could not settle and were more likely to set up extractive institutions. These institutions persisted to the present. Exploiting differences in European mortality rates as an instrument for current institutions, we estimate large effects of institutions on income per capita. Once the effect of institutions is controlled for, countries in Africa or those closer to the equator do not have lower incomes. (JEL O11, P16, P51).
In this paper we explore how innovation and structural change affected economic development in the long run, by which we mean a period such as the one between the industrial revolution and the present. We separate the period since the industrial revolution into two sub periods, which we call 'necessities' and 'imaginary worlds' and focus on three trajectories, increasing productive efficiency, increasing output variety, and increasing output quality and differentiation. In the paper we show how a combination of the three trajectories gave rise to the transition between 'necessities' and 'imaginary worlds' and propose a mechanism of economic development which could have given rise to the type of economic system which we can observe today. To create growing output quality and differentiation higher competencies were required. These higher competencies required higher levels of education and demanded higher wages, which contributed to raise consumers' purchasing power. These phenomena, combined with the income effect of the creation of new sectors, generated the disposable income with which consumers could purchase the new, higher quality, non necessities, goods and services generated by innovation. In the paper we study the impact of several model parameters on the stability of the virtuous circle previously described. (c) 2013 Elsevier Inc. All rights reserved.
The purpose of this paper is to empirically determine the effects of political instability on economic growth. By using the system-GMM estimator for linear dynamic panel data models on a sample covering up to 169 countries, and 5-year periods from 1960 to 2004, we find that higher degrees of political instability are associated with lower growth rates of GDP per capita. Regarding the channels of transmission, we find that political instability adversely affects growth by lowering the rates of productivity growth and, to a smaller degree, physical and human capital accumulation. Finally, economic freedom and ethnic homogeneity are beneficial to growth, while democracy may have a small negative effect.
Against the backdrop of Baumol’s model of ‘unbalanced growth’, a recent strand of literature has presented models that manage to reconcile structural change with Kaldor’s ‘stylized fact’ of the relative constancy of per-capita GDP growth. Another strand of literature goes beyond this, arguing that the expenditure shifts toward Baumol’s ‘stagnant’ sector stimulate rather than dampen long-term economic growth because of the human capital-accumulating nature of major ‘stagnant’ services (like health care and education). This paper tests the relationship between structural change and economic growth empirically by means of a Granger-causality analysis of a panel of 18 OECD countries.
This paper suggests that the weak empirical effect of human capital on growth in existing cross-country studies is partly the result of an inappropriate specification that does not account for the different channels through which human capital affects growth. A systematic replication of earlier results from the literature shows that both, initial levels and changes in human capital, have positive growth effects, while in isolation, each channel often appears insignificant. Moreover, the effects are heterogeneous across countries with different levels of development. The results suggest that the effect of human capital is likely to be underestimated in empirical specifications that do not account for both channels. This study therefore complements alternative explanations for the weak growth effects of human capital based on outlier observations and measurement issues.
Less developed countries tend to experience higher output volatility, a fact that is, in part, explained by their specialization in more volatile sectors. This paper proposes theoretical explanations for this pattern of specialization -- with the complexity of the goods playing a central role. Specifically, less developed countries with low levels of human capital, or alternately, with lower institutional ability to enforce contracts, will specialize in less complex goods which are also characterized by higher levels of output volatility. We provide novel empirical evidence that less complex industries are indeed more volatile.
This paper presents a theoretical model to analyze the effects of technology change on growth rates of income and human capital in the uncertain environments of technology. The uncertainty comes from two sources: the possibility of a technology advance and the characteristics of new technologies. We set up an overlapping generations model in which young agents invest in both width and depth of human capital in order to adopt new technologies. The model develops explicitly the micro-mechanism of the role of human capital in adopting new technologies as well as that of the process of human capital production in the uncertain environments. In our model, a higher level of width of human capital relative to the level of depth leads one country to a higher growth path. We also show that an economy can have different growth paths depending on the initial structure of human capital and the uncertainty about the nature of new technologies. In particular, new technologies with more uncertain characteristics may adversely affect human capital accumulation and income growth, leading the economy to a low growth trap.