Determinants of Economic Growth: How does Human Resources, Natural Resources,

Technology and Capital Formation affect the Gross Domestic Product (GDP)?

SUMMARY GROUP 3

I. Norshafinaz binti Mad Isa (2019359353)

II. Nur ‘Aisyah binti Abdul Malek (2019581987)
III. Nur Amira binti Effendi (2019361409)
IV. Nur Izanie binti Ismail (2019361455)

1. Author(s)/ Year:

i) Priya Gupta (2021) (1), Durmus Cagri Yildrim (2021) (2), Idowu Opeoluwa Isreal
Akingba (2018), Cassio Nobrega Besarria (2018), Mahyudin Ahmad (2017)

ii) T. An (2020) (6), B. Guru (2019) (7), R. Mohamad Shafi (2021) (8), F. Boldeanu
(2015) (9), M. Wadud (2018) (10)

iii) Themba G. Chirwa (2018) (11), Naqeeb Ur Rehman (2014) (12), Laura Marquez-
Ramos (2017) (13), Suwastika Naidu (2013) (14), Mohammed Ayoub Ledhem (2020)
(15)

iv) Justin Joy (2019) (16), Anthoy Orji (2018) (17), Olumide Olusegun Olaoye (2021)
(18), Soumyananda Dinda (2013) (19), Tanveer Ahsan (2016) (20)

2. Country:

i) Brazil, Rusia, India, China, South Africa (1), Middle Income Countries (2), Singapore
(3), Brazil (4), North America (5)

ii) Asia (6), Brazil, Russia, India, China, South Africa (7), Malaysia (8), Western
countries, Europe, Middle East, Asia (9), Low Middle Income Countries (10)

iii) Europe, Asian, African (11), Pakistan (12), Spain (13), Pacific Island countries (14),
Southeast Asia (15)

iv) Brazil, Russian Federation, India, China, South Africa (16), Nigeria (17), West African
States (18), India (19), Pakistan (20)
3. Novelty: The main contribution of such an approach is to show that these determinants
in terms of human resources, natural resources, technology and capital formation have a big
influence in the increases of the Gross Domestic Product (GDP) or economic growth. It
provides strategies for the government on how they can actually utilize these determinants
to maximize economic growth. Additionally, this work was also conducted to determine each
of the determinants’ characteristics, formulas, macroeconomic and governance factors that
could affect the economic growth by increasing the GDP of the country.

4. Sectors:

i) Macroeconomic (1), Female Labour (2), Health capital (3), Income inequality (4),
Social capital (5)

ii) Foreign Direct Investment, FDI (6), Finance (7), Islamic Investment and Capital
Market (8), Economy (9), Foreign Direct Investment, Economy and Finance (10)

iii) Electricity consumption (11), Foreign direct investment, FDI (12), education (13),
Central government health expenditure and Medical technology (14), Sukuk financing
(15)

iv) Economic growth (16), Foreign direct Investment (17), Foreign capital inflows and
Institutions (18), Social Capital and developing countries (19), Capital structure and
panel data analysis (20).

6. Definition of Dependent Variable (DV): Economic growth (GDP)

Economic growth is defined as an increase in the instruments and products used in

every country or region to meet human needs. A method for determining economic
growth rate entails determining whether there has been a real increase (excluding price
increases) in Gross Domestic Product (GDP) from one year to the next, as GDP
represents the market equivalent of all measurable values produced by one economy.

7. Formula to calculate Dependent Variable (DV):

GDP = C + I + G +X - M

Components:
C = Consumptions, I = Investment, G = Government spending, X = Export, M = Import
 8. The list of Independent Variable (IV):

I. Inflation (P. Gupta, 2021)

II. FDI inflow (T. An, 2020), (P. Gupta, 2021)
III. Unemployment rate (M. Wadud, 2018)
IV. Current account balance (M. Wadud, 2018)
V. Female Labour Force Participation rate (D. Cagri Yildrim, 2020)
VI. Human Capital (Education) (D. Cagri Yildrim, 2020) (I. Isreal, 2018)
VII. Endogenous model of economic growth (Olumide Olusegun Olaoye, 2020)
VIII. ( Tanver Ahsan, 2016)
IX. Electricity consumption per capita (EKWH), investment (INV), human capital
development (HC), international trade (TRADE), population growth (POPG), government
consumption (GC), inflation (INF) ( Themba G. Chirwa, 2018)
X. FDI inflows, exports, literacy rate (Naqeeb Ur Rehman, 2014)
XI. Enrolment ratio secondary education (ENRS), enrolment ratio tertiary education (ENRT),
physical capital (PHY), labour force with secondary education (LABS), labour force with
tertiary education (LABT), government expenditure on education (EXP) (Laura Marquez-
Ramos, 2017)
XII. Advancement in health technology, Central government expenditure on health services,
Log of base year gross domestic product per worker, Growth of capital investment per
worker (Suwastika Naidu, 2013)
XIII. Sukuk, gross fixed capital formation (GFCF), trade, consumer price index (CPI)
(Mohammed Ayoub Ledhem, 2020)

9. Formula for Independent Variable (IV):

i) Inflation:

= (CPI Current Year - CPI Previous Year)/CPI Previous Year x 100

ii) FDI inflow:

= The value of inward direct investment made by non-resident investors in

the reporting economy

iii) Unemployment rate:

= (Total Number of Unemployed/Total Number in The Labor Force) x 100

iv) Current account balance:

= (Export - Import) + Net Income + Net transfers

 v) FLFPR

vi)

vii) Endogenous model of economic growth:

yit = αyi; t−1 + βKit + fFCIit + δGit + πXit + εit

; where yt = economic growth at time, K = infrastructure investment, FCI = a

vector of foreign capital inflow, G = Government spending, X = economic
variables (trade balance and institutional quality), εit = usual terror term.

viii) Current profitability

= ( Net profit before tax/ total assets)

● Electricity consumption:

● Foreign Direct Investment:

● Education:

● Central government health expenditure and Medical technology:

● Sukuk financing:

10. The relationship between DV and IV:

The Gross Domestic Product (GDP) depends on the inflation rate, foreign direct inflow,
unemployment rate, current account balance, Female Labour Force Participation rate,
Human Capital, Endogenous model of economic growth and Current profitability.