ECONOMIC GLOBALIZATION, ECONOMIC GROWTH, AND HUMAN CAPITAL : EMPIRICAL EVIDENCE USING THREE STAGE LEAST SQUARE IN INDONESIA
Abstract
The pace of globalization is increasing rapidly and dynamically as time goes by. Indonesia, located takes advantage of globalization to encourage economic growth. However, over the last decade, from 2000 to 2019, Indonesia's economic globalization index has tended to decline along with the increase in the global economic globalization index. Indonesia's economic growth has been relatively stagnant. Human capital, as the primary input in Indonesia's economic system, is suspected to be suboptimal. In the National Medium-Term Development Plan (RPJMN) for 2020-2024, economic growth and human capital are the main focus in achieving national prosperity. Human capital in this study uses health indicators as a proxy for assessing productivity and educational investment approaches. Data is transformed to meet the stationarity requirements of time series data. The study employs the Three Stage Least Square (3SLS) simultaneous equation method to examine total and direct effects. The estimation results show that changes in globalization growth are directly influenced by changes in economic growth, exchange rate growth, and inflation. Changes in economic growth are directly influenced by changes in exchange rate growth, globalization index growth, and inflation. Human capital is directly influenced by changes in globalization index growth, changes in economic growth, inflation, previous-year inflation, and changes in unemployment rates
Downloads
References
N. Verter and C. N. Osakwe, “Economic Globalization and Economic Performance Dynamics: Some New Empirical Evidence from Nigeria,” Mediterranean Journal of Social Sciences, vol. Vol 6 No 1, 2015, doi: 10.5901/mjss.2015.v6n1p87.
A. Dreher, N. Gaston, and P. Martens, Measuring globalisation - gauging its consequences. NewYork: Springer, 2008.
N. Potrafke, “The evidence on globalisation,” World Economy, vol. 38, no. 3, pp. 509–552, 2015, doi: 10.1111/twec.12174.
P. R. Krugman, M. Obstfeld, and M. J. Melitz, International Economics Theory and Policy. 2017.
(BAPPENAS), Rencana Pembangunan Jangka Menengah Nasional 2020 - 2024. 2020.
W. B. Group, “The Human Capital Index 2020 Update: The Human Capital in the Time of Covid-19,” Washington, 2021. doi: 10.1596/978-1-4648-1552-2.
J. H. Dunning and S. M. Lundan, Multinational Enterprises and the Global Economy. USA: Edward Elgar Publishing, Inc, 2008.
T. Tambunan, Perdagangan Internasional dan Neraca Pembayaranan. Jakarta: Pustaka LP3ES, 2000.
N. G. Mankiw, Macroeconomics, 8th ed. New York: Worth Publishers, 2012.
G. Mankiw, D. Romer, and D. Weil, “A Contribution to the Empirics of Economic Growth,” Quarterly Journal of Economics 107, 1992.
M. P. Todaro and S. C. Smith, Pembanguna Ekonomi Edisi Kesebelas Jilid 1. Jakarta: Erlangga, 2011.
A. Sharpe, The Development of Indicators for Human Capital Sustainability. Montreal: McGraw-Hill, 2001.
D. B. Kwon, “Human Capital and its Measurements,” in In 3rd OECD World Forum on “Statistics, Knowledge and Policy” Charting Progress, Building Visions, Improving Life, Busan, Korea, 2009.
M. Shuaibu and P. T. Oladayo, “Determinants of human capital development in Africa: a panel data analysis,” Oeconomia Copernica, vol. 7(4), pp. 523–549, 2016, doi: https://doi.org/10.12775/OeC.2016.030.
M. O. Oketch, “Determinants of human capital formation and economic growth of African countries,” Economics of Education Review, vol. 25(5), pp. 554–564, 2006.
A. Jahanger, M. Usman, M. Murshed, H. Mahmood, and D. B. Lorente, “The linkages between natural resources, human capital, globalization, economic growth, financial development, and ecological footprint: The moderating role of technological innovations,” Resources Policy, vol. 76, 2022, doi: https://doi.org/10.1016/j.resourpol.2022.102569.
R. M. McNab and R. E. Moore, “Trade policy, export expansion, human capital and growth,” Journal of International Trade and Economic Development, vol. 7, no. 2, pp. 237–256, 1998, doi: 10.1080/09638199800000013.
A. Dhrifi, “Foreign direct investment, technological innovation and economic growth: empirical evidence using simultaneous equations model,” International Review of Economics, vol. 62, no. 4, pp. 381–400, 2015, doi: 10.1007/s12232-015-0230-3.
B. H. Baltagi, Econometrics, Fourth. New York: Springer, 2008.
D. N. Gujarati and D. C. Porter, Basic Econometric, 5th ed. New York: McGraw-Hill, 2009.
C. W. J. Granger and P. Newbold, “Spurious Regressions in Econometrics,” Journal of Econometrics, vol. 2(2), pp. 111–120, 1974.
R. S. Pindyck and D. Rubinfeld, Econometric Models and Economic Forecast, 3rd ed. New York: McGraw-Hill, 1991.
R. Davidson and J. G. MacKinnon, Estimation and Inference in Econometrics. Oxford University Press, 1993.
W. H. Greene, Econometric Analysis, 5th ed. New York: Pearson Education, Inc, 1993.
S. Gygli, F. Haelg, N. Potrafke, and J. Sturm, “The KOF Globalisation Index – revisited,” pp. 543–574, 2019.
Z. Iba and A. Wardhana, “Pengaruh Inflasi, Suku Bunga SBI, Nilai Tukar Rupiah Terhadap Usd, Profitabilitas, Dan Pertumbuhan Aktiva Terhadap Harga Saham Perusahaan Pembiayaan Di Bursa Efek Indonesia,” Jurnal Kebangsaan, vol. 1(1), pp. 1–6, 2012.
G. J. Szekely and M. L. Rizzo, “A new test for multivariate normality,” Journal of Multivariate Analysis, vol. 93(1), pp. 58–80, 2005.
Copyright (c) 2024 Qorinul Huda, Nofita Istiana
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Authors who publish with this Journal agree to the following terms:
- Author retain copyright and grant the journal right of first publication with the work simultaneously licensed under a creative commons attribution license that allow others to share the work within an acknowledgement of the work’s authorship and initial publication of this journal.
- Authors are able to enter into separate, additional contractual arrangement for the non-exclusive distribution of the journal’s published version of the work (e.g. acknowledgement of its initial publication in this journal).
- Authors are permitted and encouraged to post their work online (e.g. in institutional repositories or on their websites) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published works.
1.gif)
