Causality between Capital Flow, Human Capital Development and Economic Growth: A Case of Nigeria

Abstract

This paper explored the impact of capital flow, human capital development on economic growth using annual time series data. To achieve our objectives; pairwise granger causality and dynamic autoregressive model was used. And we found no causality between capital flow (proxied by de jure and de facto measures of capital openness), human capital development (education expenditure and health expenditure) and economic growth. Again de jure (Deju) have a significant impact on economic growth. While foreign direct investment (fdin), foreign portfolio investment (pfin), credit to private sector (cpsn), external debt (debt), total education expenditure (exed), and total health expenditure (exht) have no significant impact on the growth rate.