This paper focuses on the impact of investment in education on economic growth in Mauritius. It is an attempt to explore the extent to which education level of the Mauritian labour force affects its economic growth that is its output level. We have used the Cobb-Douglas production function with constant returns to scale where human capital is treated as an independent factor of production in the human capital augmented growth model. We expect to contribute to the existing literature by bringing evidence from a data set for the period 1990 to 2006 obtained from the central statistical office and Bank of Mauritius reports. The results reveal that human capital plays an important role in economic growth mainly as an engine for improvement of the output level. There is compelling evidence that human capital increases productivity, suggesting that education really is productivity-enhancing rather than just a device that individuals use to signal their level of ability to the employer.

This paper primarily focuses on the impact of financial leverage on investment decisions of firms and it is an attempt to explore the impact of financial leverage on investment levels using firm-level panel data in Mauritius. We expect to contribute to the existing literature by bringing evidence from a panel data set, which comprises 27firms, all listed on the Stock Exchange of Mauritius (SEM), sampled over a 15 year-period (i.e. from 1990 to 2004). In addition, we demarcate between two types of firms, namely: (i) high-growth firms; and (ii) low-growth firms. The results reveal a significant negative relationship between leverage and investment. More interestingly, while we found a negative relationship between leverage and investment for low growth firm, our econometric results reveal an insignificant relationship between the two variables for high growth firm.

ABSTRACT

The key aim of this paper is to test the relevance of the different financing theories for explaining capital structure choice in the Small and Medium Enterprises (SMEs) sector in Mauritius. One of the areas of financial theory that has worried much of academicians and professionals is debt policy decisions in firms due to the limited study in this field. Three of the most relevant theories of capital structure are explored, namely the Trade Off Theory, the Agency Theory and the Pecking Order Theory (POH). Hence, in order to shed more light over this issue, an empirical analysis has been carried out over a panel data sample of 25 firms of SMEs for the period 2002-2008, using quantitative analysis. The panel data methodology is used to test empirical hypotheses and controls for firm heteroskecedasticity and corrects for autocorrelation among the variables that are involved. The findings show that some theories are not in line as such with the results obtained from the analysis as the POH. However, some of the Capital Structure Theories are considered important in determining financial leverage of SME's in Mauritius like agency costs involved, information asymmetry problems, liquidity and cash flow problems. The main implication of this study is to understand the position of SME in Mauritius in terms of their debt and its importance and contribution to the National Income.

The key aim of this paper is to introduce a standard-based model