Economics at your fingertips  

Institutions, human capital and economic growth in developing countries

Md Akther Uddin, Md Hakim Ali and Abul Masih ()

Studies in Economics and Finance, 2020, vol. 38, issue 2, 361-383

Abstract: Purpose - This paper aims to study institutions, human capital and economic growth in developing countries. Design/methodology/approach - The study applies dynamic system Generalized Method of Moments (GMM) and simultaneous quantile regression on a panel of 120 developing countries for the period of 1996-2014. Findings - The findings show that human development and institutions do have a significant positive effect on economic growth. Interestingly, institutions and human development have a significant negative interactive effect on the economic growth of developing countries. This paper argues that incremental investment in human development would impact economic growth negatively in the presence of weak and dysfunctional institutions because additional stock tends to be employed in rent-seeking and socially unproductive activities. Research limitations/implications - The policy makers should bear in mind the critical role played by the institutions and the initial stage of growth of a country in making their education and health policies more effective. Originality/value - The most important novelty is the study of various transmission channels: political, economic and financial institutions through which human development affect economic growth in developing countries. This paper also studies the Islamic economic development concept and empirically investigates whether Muslim countries are different from their counterparts. Moreover, this study extends the existing empirical growth literature by simultaneously applying dynamic system GMM and quantile regression techniques.

Keywords: Political; Human development; Quantile regression; Economic growth; System GMM; Economic and financial institutions (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link) ... d&utm_campaign=repec (text/html) ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1108/SEF-10-2019-0407

Access Statistics for this article

Studies in Economics and Finance is currently edited by Prof Niklas Wagner

More articles in Studies in Economics and Finance from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().

Page updated 2023-05-18
Handle: RePEc:eme:sefpps:sef-10-2019-0407