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Article Type

Research Article

Abstract

Human capital is considered a vital catalyst for industrial sector growth. However, the lack of relevant skills and technical expertise can be a great setback to industrial growth. Thus, this study aimed to examine the effect of human capital development on industrial sector growth in Sub Saharan African (SSA) countries. The study makes use of World Bank data from 1972 to 2021 using a heterogeneous dynamic panel modeling. Due to cross-sectional dependence, both the first and second-generation unit root tests were examined in the study showing evidence of mixed order of integration. The study employed other econometric methods in the study such as mean group (MG), pooled mean group (PMG), and dynamic fixed effect (DFE) estimator but the Hausman test indicates the PMG as the most efficient method of estimation. To solve the cross-sectional dependence and account for unobserved common factors, the CS-ARDL common correlation effect pool mean group (CCEPMG) was examined. The result indicates that government expenditure on education has a negative and significant effect on industrial sector growth while life expectancy has a positive and significant effect in the short run. However, in the long run, tertiary school enrolment and life expectancy have a positive and significant effect while government expenditure on education has a negative but insignificant effect on industrial sector growth. The results further indicate that there exists a long run asymmetry nexus between human capital and industrial sector growth. The study recommends that SSA member countries should initiate strategies to improve the quality of human capital such as school enrolment and curriculum that are in line with industrial sector growth to improve the industrial value added.

Keywords

Human capital, industrial sector growth, life expectancy, educational enrolment, SSA, value added

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