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Testing the higher education-led growth hypothesis in a small island: an empirical investigation from a new version of the Solow growth model

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Abstract

This study employs a new version of the Solow Growth Model in order to investigate the higher education-led growth (HELG) hypothesis in the case of North Cyprus. Results reveal that a long-run equilibrium relationship exists between real income growth of North Cyprus and its determinants, namely capital, labor, and the higher education sector. Results show that real income growth converges to its long-term equilibrium level by 10.9 %. Granger causality tests suggest undirectional causality from higher education growth to real income growth in North Cyprus. Therefore, the HELG hypothesis can be inferred for the Turkish Cypriot economy.

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Authors and Affiliations

  1. Department of Banking and Finance, Eastern Mediterranean University, 95 Famagusta, Via Mersin 10, North Cyprus, Turkey

    Salih Katircioğlu

  2. Department of Business Administration, Eastern Mediterranean University, 95 Famagusta, Via Mersin 10, North Cyprus, Turkey

    Sami  Fethi

  3. Department of Educational Sciences, Eastern Mediterranean University, 95 Famagusta, Via Mersin 10, North Cyprus, Turkey

    Hamit Caner

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  1. Salih Katircioğlu
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  2. Sami  Fethi
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  3. Hamit Caner
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Correspondence to Salih Katircioğlu.

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Katircioğlu, S.,  Fethi, S. & Caner, H. Testing the higher education-led growth hypothesis in a small island: an empirical investigation from a new version of the Solow growth model. Qual Quant 48, 729–744 (2014). https://doi.org/10.1007/s11135-012-9798-9

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