The Role of Human Capital and Export Diversification in the Growth Performance of Emerging and Developing Asian Countries

SUNIL DASH; Nazmullah Bin Tariq

doi:10.66445/twe.v44i3.282917

Authors

SUNIL DASH International Affairs Division, KKUIC, Khon Kaen University, Thailand
Nazmullah Bin Tariq Department of Economics, University of Rajshahi, Bangladesh

DOI:

https://doi.org/10.66445/twe.v44i3.282917

Keywords:

Export Diversification, Margins, Economic Growth, Human Capital

Abstract

Using balanced panel data of 14 emerging and developing Asian countries over the period 1980-2013, this paper examines the importance of human capital in the relationship between export diversification, margins, and growth. Estimates from the Arellano-Bond panel GMM estimator reveal that at the aggregate level, export concentration has a positive impact on economic growth. The interaction coefficient between export diversification and human capital reveals that a higher level of human capital magnifies the positive impact of export concentration on growth. At the margin level, we found that the intensive margin of concentration has an overall positive impact on growth. The interaction coefficient between the extensive margin and human capital reveals that a higher level of human capital magnifies the positive impact of the extensive margin of diversification on growth. The complementarity between the intensive margin of diversification and human capital in impacting growth is inconclusive. Our findings are robust when an alternative estimate, such as the fixed effects estimator, is used. We also assess the credibility of statistical conclusions by testing whether the estimated relationships are sensitive to the choice of the dependent variable. Similar outcomes are obtained when growth in GDP per capita is used as an alternate indicator of economic growth in place of GDP growth. To fully benefit from knowledge spillovers within the framework of growth returns from international trade, it is recommended that policymakers in the sampled countries focus more on the development of their human capital.

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