An Empirical Analysis of Causal Nexus Between Higher Education and Economic Growth in BRICS Countries

An Empirical Analysis of Causal Nexus Between Higher Education and Economic Growth in BRICS Countries
Authors: Azharuddin Mohammad Mussaiyib, Kailash Chandra Pradhan
Journal: Transnational Corporations Review
Volume & Issue: Volume 16, Issue 3, September 2024

The article contributes to understanding the role of human capital development in emerging economies, particularly within the BRICS context. By using the gross enrollment ratio (GER) as a proxy for higher education participation and GDP to measure economic growth, the study explores the interdependence between education systems and macroeconomic outcomes. Time series analyses employing vector error correction models (VECM) and vector autoregressive models (VAR) reveal both bi-directional and uni-directional causal linkages between higher education and economic growth, indicating that investment in tertiary education can directly impact national economic development, and vice versa.

Panel data analysis using the panel vector autoregression (PVAR) model highlights that the influence of higher education on economic growth is more significant than the reverse effect. This finding emphasizes the critical importance of strengthening higher education systems as a strategic tool for sustainable economic development in BRICS countries. By quantifying the educational-economic nexus, the study provides empirical evidence supporting policy measures that enhance access, quality, and capacity in higher education to stimulate long-term economic growth.

The research aligns with broader discussions in development economics and human capital theory, reinforcing the idea that strategic investment in education is essential for fostering competitive, knowledge-based economies in the Global South.