Impact of Natural Resource Rents and Institutional Quality on Human Capital: A Case Study of the United Arab Emirates

Ruba Aljarallah
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Ruba Aljarallah: School of Management, Cranfield University, Bedford MK43 0AL, UK

Resources, 2019, vol. 8, issue 3, 1-11

Abstract: For many years, the United Arab Emirates has been using its natural resource wealth to develop infrastructure and attain economic growth. Nevertheless, human capital theory stresses the importance of human capital to reach sustainability in the long-term. This study examines the impacts of natural resource rents and institutional quality on human capital by applying the cointegration and error correction model based on the autoregressive distributed lag (ARDL) approach. The study uses corruption and law and order as proxies for institutional quality. The results indicate that one percent increases in resource rents and corruption decrease the human capital by 0.16% and 0.14%, respectively, in the long-term. Moreover, in the short-term, the current corruption and lag of resource rents have significant negative impacts on human capital. However, law and order has a positive impact on human capital in both the short and long-term. Thus, this study suggests that there is an instant need to prioritize education to reach long-term sustainability.

Keywords: natural resource rents; human capital; corruption; law and order; United Arab Emirates (search for similar items in EconPapers)
JEL-codes: Q1 Q2 Q3 Q4 Q5 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jresou:v:8:y:2019:i:3:p:152-:d:261693

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