Human Capital Investment and Economic Growth in Saudi Arabia: Error Correction Model

Abla A. H. Bokhari
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Abla A. H. Bokhari: Department of Economics, Faculty of Economics and Administration, King Abdulaziz University, Jeddah, Saudi Arabia.

International Journal of Economics and Financial Issues, 2017, vol. 7, issue 4, 104-112

Abstract: To examine the relationship between investment in human capital and economic growth in the Kingdom of Saudi Arabia for the period 1970-2014. Quantitative research design has been implemented. Granger Causality approach has been employed, followed by error correction model. The data stationarity and integration order have been tested, using the augmented Dickey-Fuller. Any long-run or short-run causality was not observed between expenditure on education and economic growth (per capita gross domestic product). 73.6% variation has been indicated by fixed capital formation of gross national product, which is considered as an effective aspect. The results indicated that results are statistically significant with P value (0.000) at 5% level of significance. Investment in human capital, with the right policy assessments and rehabilitation, can be translated into an essential element of growth in the Saudi economy

Keywords: Economic Growth; Human Capital; Error Correction model (search for similar items in EconPapers)
JEL-codes: G0 G10 G38 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ1:2017-04-15

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