An Analysis of the Endogenous Factors for the Growth of Developing Countries

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In this research, we carried out a theoretical and empirical analysis of the endogenous factors of growth for the developing countries. We have first revised the neoclassical growth models allow an explanation of economic growth by endogenous factors such as domestic saving rate and human capital investment. In addition, in view of the fact that the total funds for physical and human investments are often limited, we extended the framework to allow for the tradeoff between physical and human capital investments. Based on the hypotheses derived from this model, we have carried out empirical analyzes. In 1994, we have gathered date for 68 countries for the period 1965-88, and examined the endogenous factors of growth. In 1995, we have elaborated upon our data set and collected data for 78 countries for the period 1980-90. Based on this data, we have examined the homogeneity of the data set and used statistical procedure to subdivide the sample countries into several groups. The major fin … More dings include : (1)developing countries are diverse in their economic structure, so that we should not bundle them in one when carrying out empirical analysis ; (2) physical capital investment affects growth positively in every group of countries, but human capital inverstment does not affect growth positively in the less advanced countries. The positive effect is limited to middle-income and high-income countries ; (3)in middle-income countries, the effect of human capital investment on growth exceeds that of the physical capital investment, so that shifting investment funds toward human investment will enhance a faster economic growth ; etc. The paper summarizing these results are conditionally accepted in the Asian Economic Journal and is forthcoming. In addition, an analysis of the causal relationship between economic growth, imports and exports has been undertaken by a research collaborator and the results are summarized in a paper titled "Causality between Exports and Growth in Asian NICs : Further Empirical Evidences." Less