The Impact of Human Capital on Economic Growth: Empirical Evidence from Sudan

Arabi, Khalafalla Ahmed Mohamed; Abdalla, Suliman Zakaria Suliman

doi:10.5430/rwe.v4n2p43

Cited by 30 publications

(10 citation statements)

References 36 publications

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“…Thus, our results in part do not confirm Elwasila Saeed Elamin (2017a) who found a positive relationship between health and economic growth in Sudan, when considered in isolation of resource rents. Also, our results contradict Arabi and Abdalla (2013) who found that school attainment and health have positive and significant effects on economic growth in Sudan. However, our results are in line with Akpan and Chuku (2014) who found the negative effect of resource abundance on human capital accumulation in Nigeria through the channels of the DD and crowding out of human capital effects.…”

Section: Discussioncontrasting

confidence: 99%

Resource Rents, Human Development and Economic Growth in Sudan

Mohamed

2020

Economies

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This study investigates the relationship between natural resource rents, human development and economic growth in Sudan using co-integration and vector error correction modelling (VECM) over the period 1970–2015. Institutions proved to play a role in determining a difference in whether a country is cured or blessed by resource abundance. In the case of Sudan, no time series data is available on institutional quality and is therefore excluded from the analysis. The role of institutions and macroeconomic policies is captured by other variables included in the empirical model. Co-integration tests confirm the existence of a long run equilibrium relationship between resource rents, human development and economic growth in Sudan. Empirical evidence from the estimated VECM shows that economic growth is positively affected by resource rents and development expenditure but surprisingly negatively affected by life expectancy at birth in the short run. In the long run, resource rents, school enrolment, life expectancy and financial development have negative significant effects on economic growth. Only development expenditure is found to affect economic growth positively. Resource rents are found to weaken education and health levels and this is indirectly channeled into negative effects of resource rents on economic growth. These results suggest that the government has been neglecting investments to build up human capital necessary for inclusive growth. Long run Granger causality tests show a unidirectional causal relationship running from resource rents to GDP growth as well as from development expenditure to GDP growth. School enrollment, life expectancy and financial development are found to be negatively Granger causing GDP growth. Long run causal relationships reconfirm that a resource curse exists indirectly mediated by weak human capital. The study recommends that the government should manage natural resource rents with a policy framework supporting creation of a virtuous economic circle between human development and economic growth. If pursued, this would promote sustained, inclusive and equitable growth in Sudan.

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Section: Discussioncontrasting

confidence: 99%

Resource Rents, Human Development and Economic Growth in Sudan

Mohamed

2020

Economies

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“…Other studies also revealed that the effect of FDI on economic growth depend on the level of human capital (Abdalla, 2013;Sukar & Hassan, 2007;Borensztein, 1998). Recently, UNCTAD (2013) and other studies (Sala & Trivin, 2014;IMF, 2009) suggest that the positive effect of FDI depend on openness to international trade.…”

Section: Empirical Literaturementioning

confidence: 97%

“…Again, the growth impact of FDI with and without other important covariates will not be the same. Indeed, literature recognizes the role of factor interdependences in influencing economic growth (UNCTAD, 2012Abdalla, 2013). For example, well developed infrastructure attracts more foreign firms than otherwise; availability of competent human capital speeds he return from investment, etc, ceteris paribus.…”

Section: Additional Modelsmentioning

confidence: 99%

The Impact of Foreign Direct Investment (FDI) on Economic Growth in Eastern Africa: Evidence from Panel Data Analysis

Zekarias¹

2016

AEF

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This study has analyzed the impact of Foreign Direct Investment (FDI) on Economic growth in 14 Eastern Africa countries by employing 34 years (1980-2013) panel data, using dynamic GMM estimators after checking for autocorrelation and model specification tests. Developing countries have been attracting FDI attempting to reduce resource gaps, technology gap, unemployment and trade deficits. However, unlike classical growth theories, the empirical studies sought inconclusive effect of FDI on growth. The findings confirm that FDI has positive and marginally significant effect of FDI on economic growth, the rate of economic conditional convergence at 5%, absence of significant crowding out effect moving from FDI to domestic investment, interdependence of domestic investment and trade openness in the sub-region. Thus, I conclude that FDI is a key deriver of economic growth and a catalyst to economic conditional convergence in Eastern Africa; so, the subregion need to attract more FDI by improving investment environment, strengthening regional integration, developing human capital and basic infrastructure, and promoting export-oriented investment.

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“…Therefore, under normal circumstances, the increase in PDRB causes greater government revenue, as well as greater government spending. Development expenditure has a positive impact on Gross Domestic Product (GDP) growth, which suggests that investment in development can support economic growth [28,[50][51][52]. Furthermore, results show that investing in infrastructure can accelerate economic growth.…”

Section: Discussionmentioning

confidence: 99%

Government infrastructure investment stimulation through booming natural resources: Evidence from a lower-middle-income country

Hidayat,

Supartoyo,

Setiawan

et al. 2024

PLoS ONE

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The dynamics of central government funding to regions depend on local investments. In regional autonomy, local governments are encouraged to be more self-reliant from the central government. For regions with high natural resource yields, they will not encounter difficulties in meeting their fiscal needs. Community welfare can be realized through fulfilling basic needs, one of which is infrastructure development. High-quality infrastructure will be able to contribute to further progress in trade, thus enhancing production efficiency. The objective of this research is to analyze the extent of the influence of central government transfer funds, especially the Natural Resource Revenue Sharing Funds (DBH SDA), on local government investments in infrastructure across 508 districts/cities in Indonesia. The method used is dynamic panel regression using the Generalized Method of Moment (GMM) Arellano-Bond approach. This study finds that the role of DBH SDA is still low in infrastructure spending. The role of the central government remains significant in determining infrastructure spending at the district/city level in Indonesia. This indicates that local governments rely more on other sectors in infrastructure investment. By enhancing the role of DBH SDA through technological advancements, it is hoped that the market value of natural resources can be higher through resource downstreaming. This strategy will have broader impacts, as labor needs can be absorbed not only in raw material production activities but also in the processing technology sector. Furthermore, the utilization of natural resources with modern technology can increase extraction efficiency, support sustainable development, and minimize environmental impacts.

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The Impact of Human Capital on Economic Growth: Empirical Evidence from Sudan

Cited by 30 publications

References 36 publications

Resource Rents, Human Development and Economic Growth in Sudan

Resource Rents, Human Development and Economic Growth in Sudan

The Impact of Foreign Direct Investment (FDI) on Economic Growth in Eastern Africa: Evidence from Panel Data Analysis

Government infrastructure investment stimulation through booming natural resources: Evidence from a lower-middle-income country

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