DOES HUMAN CAPITAL STIMULATE INVESTMENT IN PHYSICAL CAPITAL? EVIDENCE FROM A COST SYSTEM FRAMEWORK

Enrique Lopez-Bazo and Rosina Moreno ()

No 200717, IREA Working Papers from University of Barcelona, Research Institute of Applied Economics

Abstract: The direct effect of human capital on economic growth has been widely analysed in the economic literature. This paper, however, focuses on its indirect effect as a stimulus for private investment in physical capital. The methodological framework used is the duality theory, estimating a cost system aggregated with human capital. Empirical evidence is given for Spain for the period 1980-2000. We provide evidence on the indirect effect of human capital in making private capital investment more attractive. Among the main explanations for this process, we observe that higher worker skill levels enable higher returns to be extracted from investment in physical capital.

JEL-codes: C30 J24 O11 O47 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2007-12, Revised 2007-12
New Economics Papers: this item is included in nep-edu
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Citations: View citations in EconPapers (36)

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Related works:
Journal Article: Does human capital stimulate investment in physical capital?: Evidence from a cost system framework (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ira:wpaper:200717

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