A Panel Data Analysis of Infrastructure, Human Capital Development and Economic Growth: Evidence from 10 Newly Industrialized Countries
Keywords:
Economic growth, Human Development Index, infrastructure, Newly Industrialized Countries, Panel Data EstimationAbstract
Purpose: The impact of infrastructure and human capital development on economic growth for various countries has been examined in earlier research. However, no research has been done on panel analysis of these variables for recently industrialized nations. Using a panel approach, this study seeks to determine the impact of infrastructure and human capital development on economic growth. The research is based on data from a panel of 10 newly industrialized nations that spans a wider dataset and a longer period, 1980–2019.
Design/methodology/approach: Four-panel estimate techniques are used in this study: Arellano-Bond (GMM) dynamic panel data analysis, Fixed effect estimation, Random effect estimation, and Pooled OLS. Because many economic variables are dynamic, Arellano-Bond's (GMM) dynamic panel-data analysis is applied.
Findings: The findings show that whereas human capital development has an unexpectedly substantial negative impact on economic growth, infrastructure has an incredibly positive and significant positive influence. Other causes, such as political unrest and corruption, could also be responsible.
Practical Implications: By upgrading the health and education sectors and stimulating human capital development, these countries' governments should adopt an expansionary fiscal policy.
Originality/Value: This study could help newly industrialized policymakers formulate decisions that will promote economic development and growth in such nations.
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