Commenced in January 2007
Frequency: Monthly
Edition: International
Paper Count: 30737
Effects of Human Capital and Openness on Economic Growth of Developed and Developing Countries: A Panel Data Analysis

Authors: Fatma Didin Sonmez, Pinar Sener


Technology transfer by international trade and foreign direct investment is the most important positive outcome of open economy. It is widely accepted that new technology and knowledge have an important role in enhancing economic growth. Human capital is the other important factor assisting economic growth. In this study, the role of human capital in the growth process is examined in a view of new endogenous growth theory emphasizing on the technology transfer resulting from international trade. Using the panel data of 10 developed and 10 developing countries, impact of human capital and openness on the rate of economic growth of different countries is analysed. Evidence suggests the view that human capital and openness contribute to the economic growth in both developing and developed countries, but with different rates.

Keywords: Technology, Human Capital, Economic growth, Openness

Digital Object Identifier (DOI):

Procedia APA BibTeX Chicago EndNote Harvard JSON MLA RIS XML ISO 690 PDF Downloads 1621


[1] R. Solow, ÔÇÿ-A contribution to the theory of economic growth,-- Quarterly Journal of Economics, Vol. 70, pp. 65-94, 1956.
[2] T. W. Swan, ÔÇÿ-Economic growth and capital accumulation,-- Economic Record, Vol. 32, pp. 334-361, 1956.
[3] R. R. Nelson, ÔÇÿ-Research on productivity growth and productivity differences: Dead ends and new departures,-- Journal of Economic Literature, Vol. 19, pp. 1029-1064, 1981.
[4] K. J. Arrow, ÔÇÿ-The economic implications of learning by doing,ÔÇÿ- Review of Economic Studies, Vol. 29, pp. 155-173, 1962.
[5] H. Uzawa, ÔÇÿ-Optimal technical change in an aggregative model of economic growth,-- International Economic Review, Vol. 6, pp. 18-31, 1965.
[6] P. M. Romer, ÔÇÿ-Increasing returns and long-run growth,-- Journal of Political Economy, Vol. 94, pp. 1002-1037, 1986.
[7] R. Lucas, ÔÇÿ-On the mechanics of economic development,-- Journal of Monetary Economics, Vol. 22, pp. 3-42., 1988.
[8] D. Acemo─ƒlu, and F. Zilibotti, ÔÇÿ-Productivity differences,-- Quarterly Journal of Economics, Vol. 116, pp. 563-606, 2001.
[9] D. Li, ÔÇÿ-The welfare effect of trade in the endogenous growth model, The Canadian Journal of Economics, Vol.29, pp. 384-388.,1996.
[10] L. A. Rivera-Batiz and P. Romer, ÔÇÿ-Economic integration and endogenous growth,-- Quarterly Journal of Economics, Vol. 106, pp. 531-555, 1991a.
[11] L. A. Rivera-Batiz and P. M. Romer, ÔÇÿ-International trade with endogenous technological change,-- European Economic Review, Vol. 35, pp. 971-1001, 1991b.
[12] L. A. Rivera-Batiz and D. Xie, ÔÇÿ-Integration Among unequals,-- Regional Science and Urban Economics, Vol. 23, pp. 337-354, 1993.
[13] D. T. Coe, E. Helpman, and A. W. Hoffmaister, ÔÇÿ-North-South R&D spillovers,-- The Economic Journal, Vol. 107, pp. 134-149, 1997.
[14] M. Abramovitz, ÔÇÿ-Catching-up, forging ahead, and falling behind,-- Journal of Economic History, Vol. 46, pp. 386-406, 1986.
[15] M. Abramovitz, ÔÇÿ-The search of the sources of growth: Areas of ignorance, old and new,-- Journal of Economic History, Vol. 53, pp. 217-243, 1993.
[16] R. R. Nelson, and G. Wright, ÔÇÿ-The rise and fall of American technological leadership: The postwar era in historical perspective, ÔÇÿ- Journal of Economic Literature, Vol. 30, pp. 1931-1964, 1992.
[17] P. M. Romer, ÔÇÿ-Endogenous technological change,-- Journal of Political Economy, Vol. 98, pp.71-102, 1990.
[18] G. M. Grossman, and E. Helpman, ÔÇÿ-Trade, knowledge spillovers, and growth, European economic review,-- Vol. 35, pp. 517-526, 1991.
[19] R. B. Bhaskara, ÔÇÿ-Time series econometrics of growth models: a guide for applied economists (unpublished work style)--,2006 , unpublished.
[20] M. Eller, P. R. Haiss, K. Steiner, ÔÇÿ-Foreign direct investment in the financial sector: the engine of growth for Central and Eastern Europe,-- Europainstitut Working Papers No. 69, pp. 25, 2005.
[21] B. H. Baltagi, Econometric analysis of panel data (Book style). John Wiley & Sons Ltd, New York, 1995.
[22] J. H. Stock and M. H. Watson, Introduction to econometrics (Book style). 2003.