- Kapadokya Akademik Bakış
- Volume:1 Issue:2
- FINANCIAL DEVELOPMENT AND HUMAN CAPITAL IN TURKEY: ARDL APPROACH
FINANCIAL DEVELOPMENT AND HUMAN CAPITAL IN TURKEY: ARDL APPROACH
Authors : Elma SATROVİC
Pages : 1-15
View : 12 | Download : 6
Publication Date : 2017-12-28
Article Type : Research Paper
Abstract :The impact of human capital on financial development has not been studied quite extensively in up-to-date studies. Hence, this article tries to fill in this gap by exploring the impact of human capital on financial development in Turkey. Human capital is expected to have a positive impact on financial development since it reduces information asymmetry. In addition, it is expected to increase demand for financial services and instruments. This article investigates the long-run and short-run relationship between financial development and human capital in Turkey using ARDL approach. Data are collected over 30-years period insert ignore into journalissuearticles values(1986-2015);. In order to estimate the relationship between these economic terms, financial development is approximated using two proxy variables: broad money insert ignore into journalissuearticles values(% of GDP); and liquid liabilities insert ignore into journalissuearticles values(% of GDP);. Two proxy variables of financial development are used in order to check for the sensitivity of the results. In addition, the impact of gross capital formation insert ignore into journalissuearticles values(% of GDP); is controlled. The obtained results indicate a significant positive impact of human capital on broad money insert ignore into journalissuearticles values(% of GDP); as well as on liquid liabilities insert ignore into journalissuearticles values(% of GDP); in both, short- and long-run. Control variable is not reported to be significant. Pesaran/Shin/Smith ARDL bounds test confirms the existence of a long-run relationship.Keywords : financial development, human capital, ARDL, bounds test