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The human capital–economic growth nexus in SSA countries: what can strengthen the relationship?

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  • Roseline Tapuwa Karambakuwa
  • Ronney Ncwadi
  • Andrew Phiri

Abstract

Purpose - The purpose of this study is to examine the impact of human capital on economic growth for a selected sample of nine SSA countries between 1980 and 2014 using a panel econometric approach. Design/methodology/approach - The authors estimate a log-linearized endogenous using the fully modified ordinary least squares (FMOLS) and the dynamic ordinary least squares (POLS) applied to our panel data time series. Findings - The empirical analysis shows an insignificant effect of human capital on economic growth for our selected sample. These findings remain unchanged even after adding interactive terms to human capital, which are representatives of government spending as well as foreign direct investment. Nevertheless, the authors establish a positive and significant effect of the interactive term between urbanization and human capital on economic growth. Practical implications - The results emphasize the need for African policymakers to develop urbanized, “smart”, technologically driven cities within the SSA region as a platform toward strengthening the impact of human capital-economic growth relationship. Originality/value - This study becomes the first in the literature to validate the human capital–urbanization–growth relationship for African countries.

Suggested Citation

  • Roseline Tapuwa Karambakuwa & Ronney Ncwadi & Andrew Phiri, 2020. "The human capital–economic growth nexus in SSA countries: what can strengthen the relationship?," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 47(9), pages 1143-1159, July.
    • Handle: RePEc:eme:ijsepp:ijse-08-2019-0515
    DOI: 10.1108/IJSE-08-2019-0515
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    2. Young Ademola Obafemi, 2022. "Specialization Versus Diversification as Alternative Strategies for Sustainable Growth in Resource-Rich Developing Countries. Case of Nigeria," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 32(3), pages 1-47, September.
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    4. Oyinlola, Mutiu A. & Adedeji, Abdulfatai A. & Onitekun, Olumide, 2021. "Human capital, innovation, and inclusive growth in sub-Saharan African Region," Economic Analysis and Policy, Elsevier, vol. 72(C), pages 609-625.

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    More about this item

    Keywords

    Human capital; Economic growth; Sub-Saharan Africa (SSA) countries; Foreign direct investment (FDI); Government spending; Urbanization; C13; C23; C51; J24; O47;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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