Enhancing Economic Growth Impact of Financial Development and Human Capital through Capital Flows in Sub-Saharan Africa

Mutiu Abimbola Oyinlola and Abdulfatai Adekunle Adedeji (mutiu_oyinlola@yahoo.com)
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Mutiu Abimbola Oyinlola and Abdulfatai Adekunle Adedeji: University of Ibadan, Nigeria
Authors registered in the RePEc Author Service: Abdulfatai A. Adedeji

Journal of Economic Development, 2020, vol. 45, issue 2, 95-114

Abstract: This paper investigated the role of capital flows in shaping the relationship among financial development, human capital and economic growth in selected sub-Saharan African (SSA) countries. This study examined two different forms of capital flows; portfolio equity and foreign direct investment, and their influences on the linkages of financial development, human capital, and growth. We deployed data on eleven SSA countries covering the period between 1999 and 2014 using difference generalized method of moments. Human capital has a direct positive impact on growth only when measured in terms of its efficiency, irrespective of the measures of financial development and capital flows. We obtained mixed results on introducing capital flows irrespective of the choice of financial development and human capital measures; positive and negative impacts almost equally dominated the results albeit largely statistically insignificant and negligible coefficients. Overall, capital flows, especially, foreign direct investment dampens growth through the financial development and human capital.

Keywords: Human Capital; Capital Flows; Financial Development; Economic Growth; SSA (search for similar items in EconPapers)
JEL-codes: E44 G20 O16 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:jed:journl:v:45:y:2020:i:2:p:95-114

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