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Education expenditure and economic growth: a causal analysis for Malaysia

Mohd. Yahya, Mohd. Hussin and Muhammad, Fidlizan and Abu @ Hussin, Mohd. Fauzi and Abdul Razak, Azila (2012) Education expenditure and economic growth: a causal analysis for Malaysia. Journal of Economics and Sustainable Development, 3 (7). pp. 71-81. ISSN 2222-2855 (Electronic); 2222-1700 (Print)

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Abstract

This paper focuses on the long-run relationship and causality between government expenditure in education and economic growth in Malaysian economy. Time series data is used for the period 1970 to 2010 obtained from authorized sources. In order to achieve the objective, an estimation of Vector Auto Regression (VAR) method is applied. Findings from the study show that economic growth (GDP) positively cointegrated with selected variables namely fixed capital formation (CAP), labor force participation (LAB) and government expenditure on education (EDU). With regard to the Granger causality relationship, it is found that the economic growth is a short term Granger cause for education variable and vice versa. Furthermore, this study has proves that human capital such as education variable plays an important role in influencing economic growth in Malaysia.

Item Type:Article
Uncontrolled Keywords:Malaysian, expenditure on education, economic growth
Subjects:H Social Sciences > HB Economic Theory
H Social Sciences > HC Economic History and Conditions
Divisions:Islamic Civilisation
ID Code:31766
Deposited By: Fazli Masari
Deposited On:12 Jun 2013 11:28
Last Modified:28 Jan 2019 11:50

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