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Determinants of Human Capital Development in Africa

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  • Kunofiwa Tsaurai

Abstract

Purpose: The study had two main objectives, namely (1) to investigate the determinants of human capital development and (2) to explore if the complementarity between FDI and information and communication technology-enhanced human capital development in Africa, are in line with theoretical predictions. Design/Approach/Methodology: The study used panel data analysis (fixed effects, random effects, pooled ordinary least squares, dynamic generalized methods of moments) with African panel data ranging from 2001 to 2015. Findings: The dynamic GMM method noted that human capital development was positively affected by its own lag in a significant manner. Under all the four econometric estimation methods, FDI had no significant influence on human capital development, yet information and communication technology significantly impacted human capital development across all the methods used. The study also revealed that the complementarity between FDI and information and communication technology significantly influenced human capital development under fixed effects, random effects, and pooled OLS only. Practical Implications: Africa is urged to implement policies to strengthen ICT implementation to help the inflow of FDI improve human capital development. The study implies that African nations must implement policies to develop their financial sectors if they want to enhance human capital development. Therefore, African countries are urged to increase their expenditure in revamping and strengthening their infrastructure if they wish to enhance the development of human capital. Originality/Value: This paper is unique because it is the first of its kind to investigate the impact of the complementarity between FDI and information and communication technology on human capital development and to consider the dynamic features of human capital development data.

Suggested Citation

  • Kunofiwa Tsaurai, 2020. "Determinants of Human Capital Development in Africa," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 377-391.
    • Handle: RePEc:ers:ijebaa:v:viii:y:2020:i:4:p:377-391
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    References listed on IDEAS

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    More about this item

    Keywords

    Human capital development; Foreign Direct Investment; Africa; panel data.;
    All these keywords.

    JEL classification:

    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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