Research in Globalization (Jun 2022)
The investment development path and human development: Is there a nexus?
Abstract
To investigate the nexus between the investment development path (IDP) and human development, we modelled the human development (human development index, HDI) using generalized estimation equations and accounted for the unit interval property using non-linear link functions. The gross domestic product per capita was used as the proxy for the IDP. Using panel data of 2,568 observations from 135 countries for 1990–2019, we found a strong and positive effect of IDP on HDI. Thus, there is a nexus between IDP and human development. The 4% elasticity of the IDP, confirms the broader scope of the HDI than the IDP in capturing development. Coupled with the 60% correlation between the IDP variable and HDI, aside from serving as a proxy for each other, these could also be instruments for each other provided they are uncorrelated with the error term in the model under consideration. Trade, infrastructure, and human capital were found to enhance human development. These offer policy options for enhancing human development.
