Technology, Human Capital, and Economic Growth: Evidence from High Income OECD Countries

Abstract

In this study, technology in the form of domestic and foreign technology and human capital in the form of education and health are included in the model, and their effects on growth are examined. The education variable is further broken down into elementary, secondary, and tertiary levels. The research covers high-income OECD countries over the period 1990-2020. In the analysis, the FGLS estimator, which resists to heteroscedasticity, cross-section dependence and panel-specific autocorrelation, is employed. Results indicate that a unit increase in foreign technology increases national income by 0.037%, and a domestic technology by 0.023%. Foreign technology has a greater impact on economic growth than domestic technology. Although primary education did not have a significant effect on growth, secondary education increased growth by 0.069% and tertiary education by 0.30%. The effect of physical capital on economic growth (0.22%) is lower than tertiary education.