Endogenous specification of foreign capital inflows, human capital development and economic growth A study of pool mean group

Purpose The purpose of this paper is to empirically investigate the relationship between foreign capital inflows, human capital development (HCD) and economic growth in ECOWAS countries. Design/methodology/approach In line with the augmented Solow model, the relationship between foreign capital inflows, human capital development and gross domestic product in the ECOWAS member countries is investigated using the pool mean group method. Findings The authors find overwhelming evidence that foreign capital inflows and human development have a significant effect on economic growth in ECOWAS member countries. However, foreign direct investment (FDI), official development assistant, HCD and gross domestic investment are positively related to economic growth in sub-regions economies. Conversely, migrate official remittance, portfolio investments and external debts are negatively related to economic growth.