Accumulation and Allocation of the Investment in Human Capital for Manufacturing Growth: Evidence from Manufacturing Industries in Selected African Countries


Manitra A. Rakotoarisoa

Shahla Shapouri

Michael Trueblood


Both the accumulation of human capital and its allocation are important to spur manufacturing growth. We employed Romer’s endogenous growth model to determine the impacts of human capital accumulation and allocation on value-added per worker in manufacturing in Ethiopia, Kenya, and Mauritius. These countries offered useful comparisons because of the differences in the structure and dynamic of their manufacturing industries. The model differentiated between human capital allocated to the production and non-production (such as research and management) workers. For each country, we employed a panel of annual data available for the period 1969-97 and nine two-digit level ISIC code industries. Results showed that although the human capital allocated to production was positively associated with value-added per worker, it was the human capital accumulated and allocated to the non-production workers that most affected growth in manufacturing value added for these countries.

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