Role of human capital and foreign direct investment in promoting economic growth
Purpose– The purpose of this paper is to validate the Endogenous Growth Model by examining the impacts of Human Capital (HK) and Foreign Direct Investment (FDI) on economic growth in ten countries from Commonwealth of Independent States (CIS).Design/methodology/approach– For empirical investigation,...
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| Format: | Article |
| Language: | English |
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Emerald Insight
2015
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| Online Access: | https://repo.uum.edu.my/id/eprint/18718/1/IJSE%2042%202%2098-111.pdf |
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| author | Azam, Muhammad Ahmed, Ather Maqsood |
| author_facet | Azam, Muhammad Ahmed, Ather Maqsood |
| author_sort | Azam, Muhammad |
| collection | UUM |
| description | Purpose– The purpose of this paper is to validate the Endogenous Growth Model by examining the impacts of Human Capital (HK) and Foreign Direct Investment (FDI) on economic growth in ten countries from Commonwealth of Independent States (CIS).Design/methodology/approach– For empirical investigation, a linear regression model based on growth theory and panel data set covering the time-period from 1993 to 2011 are used. Fixed and random effects models are applied.On the basis of the Hausman test, the fixed effects model has been preferred over the random effects model.Findings
– The results support the hypothesis of the study by confirming that HK development is critical for economic growth.Similarly, FDI has been found to have a facilitating role in promoting growth in the former Soviet Republics now comprising Central Asian independent economies. This is despite of the fact that there are country-specific differences across CIS.Practical implications
– The findings suggest that investment climate in the host countries must be enriched through suitable policies.Improved domestic conditions not only enhance the performance of multinational corporations but also allow host economies to reap greater benefits of FDI inflows.Moreover, the findings demonstrate that investment in both education and health are indispensable. Therefore, improved levels of education and health should be the primary objective running concurrently with other factors in order to stimulate economic growth.Originality/value– The choice of CIS has been made because very little research has been found for the region particularly in the area of economic growth despite strong evidence of commonality in terms of landlocked geographical layout and economic and political structures of these economies.The region has gained importance gradually after independence of these states; and it has started to attract foreign funds in the shape of FDI only recently.Thus, there is a need to evaluate the future prospects pertaining to the importance of FDI and HK on growth performance of these economies and will insistently contribute to the literature. |
| first_indexed | 2024-07-04T06:08:28Z |
| format | Article |
| id | uum-18718 |
| institution | Universiti Utara Malaysia |
| language | English |
| last_indexed | 2024-07-04T06:08:28Z |
| publishDate | 2015 |
| publisher | Emerald Insight |
| record_format | dspace |
| spelling | uum-187182016-10-03T09:10:50Z https://repo.uum.edu.my/id/eprint/18718/ Role of human capital and foreign direct investment in promoting economic growth Azam, Muhammad Ahmed, Ather Maqsood HC Economic History and Conditions Purpose– The purpose of this paper is to validate the Endogenous Growth Model by examining the impacts of Human Capital (HK) and Foreign Direct Investment (FDI) on economic growth in ten countries from Commonwealth of Independent States (CIS).Design/methodology/approach– For empirical investigation, a linear regression model based on growth theory and panel data set covering the time-period from 1993 to 2011 are used. Fixed and random effects models are applied.On the basis of the Hausman test, the fixed effects model has been preferred over the random effects model.Findings – The results support the hypothesis of the study by confirming that HK development is critical for economic growth.Similarly, FDI has been found to have a facilitating role in promoting growth in the former Soviet Republics now comprising Central Asian independent economies. This is despite of the fact that there are country-specific differences across CIS.Practical implications – The findings suggest that investment climate in the host countries must be enriched through suitable policies.Improved domestic conditions not only enhance the performance of multinational corporations but also allow host economies to reap greater benefits of FDI inflows.Moreover, the findings demonstrate that investment in both education and health are indispensable. Therefore, improved levels of education and health should be the primary objective running concurrently with other factors in order to stimulate economic growth.Originality/value– The choice of CIS has been made because very little research has been found for the region particularly in the area of economic growth despite strong evidence of commonality in terms of landlocked geographical layout and economic and political structures of these economies.The region has gained importance gradually after independence of these states; and it has started to attract foreign funds in the shape of FDI only recently.Thus, there is a need to evaluate the future prospects pertaining to the importance of FDI and HK on growth performance of these economies and will insistently contribute to the literature. Emerald Insight 2015 Article PeerReviewed application/pdf en https://repo.uum.edu.my/id/eprint/18718/1/IJSE%2042%202%2098-111.pdf Azam, Muhammad and Ahmed, Ather Maqsood (2015) Role of human capital and foreign direct investment in promoting economic growth. International Journal of Social Economics, 42 (2). pp. 98-111. ISSN 0306-8293 http://doi.org/10.1108/IJSE-05-2014-0092 doi:10.1108/IJSE-05-2014-0092 doi:10.1108/IJSE-05-2014-0092 |
| spellingShingle | HC Economic History and Conditions Azam, Muhammad Ahmed, Ather Maqsood Role of human capital and foreign direct investment in promoting economic growth |
| title | Role of human capital and foreign direct investment in promoting economic growth |
| title_full | Role of human capital and foreign direct investment in promoting economic growth |
| title_fullStr | Role of human capital and foreign direct investment in promoting economic growth |
| title_full_unstemmed | Role of human capital and foreign direct investment in promoting economic growth |
| title_short | Role of human capital and foreign direct investment in promoting economic growth |
| title_sort | role of human capital and foreign direct investment in promoting economic growth |
| topic | HC Economic History and Conditions |
| url | https://repo.uum.edu.my/id/eprint/18718/1/IJSE%2042%202%2098-111.pdf |
| work_keys_str_mv | AT azammuhammad roleofhumancapitalandforeigndirectinvestmentinpromotingeconomicgrowth AT ahmedathermaqsood roleofhumancapitalandforeigndirectinvestmentinpromotingeconomicgrowth |