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Research Article Open Access
This paper investigates causality direction between education, material investment and economic growth in a panel of five MENA countries (Algeria, Egypt, Morocco, Tunisia and Turkey) during1975 to 2014. Specifics results by country will be identified about the direction of causality between the three variables. In empirical estimations we used Ganger causality tests, variance decomposition and impulse response functions to a panel data framework through the Arellano- Bond difference GMM estimator. First, we identify a causal relationship between education and economic growth as well as between education and investment. In addition, we found that the education causes economic growth after three years whereas economic growth causes the education after only one year. The results also confirm a transmission mechanism that runs from education to economic growth through material investment. This shows that increases in human capital should boost the return on physical investment. Consequently, sustaining economic growth can be performed by investment and education. Finely, according to the results we approve that emphasizing on physical investment instead of sufficient care on human capital investments is not the better way to achieve growth at medium and long run.
Education, Economic growth, Investment, Causality, GMM estimator, Panel data, Accounting Review, International Business, Indexation, Profitability, Time Series, Panel Data, Empirical Analysis, Stock Market Returns, Human Capital, Monetary Policy , Small Firms, Business Cycle, Banking Research Studies, Capital Structure, Economics Studies, Financial plan, Fiscal and tax policies , Avenues of Investment, Wealth Management, Business Theory, Organizational studies, Parameter Estimation