IMPACT OF HUMAN CAPITAL INVESTMENT ON ECONOMIC GROWTH IN MUSLIM AND NON-MUSLIM ASIAN COUNTRIES

Abstract

This research attempts to examine the long run relationship between human capital investment
and economic growth. This study consists of 12 selected Muslims and Non-Muslims countries
from SAARC and ASEAN region by taking annual data from 2001 to 2015. The objective of this
research is to analyze the influence of human capital investment, physical capital investment on
economic growth. To encounter the objective of the study IPS unit root test is applied for
determining the stationarity of data and Pedronicointegration test is applied to observe the
existence of cointegration. Fully Modified Ordinary Least Square (FMOLS) econometrics
methods have been applied to find the relationship between human capital investment, physical
capital investment and economic growth. In this study, the data of all variables have been taken
from World Bank Database (WDI). The results of panel FMOLS described that the education 
expenditure, health expenditure, gross fixed capital formation, labor force and inflation
positively linked with economic growth.