Intellectual Capital Formation and Economic Growth in Nigeria

Abstract

Education develops in individuals both physical and intellectual capacities which are critical for economic growth of a country. This study examines the contributions of education to growth in Nigeria using secondary data covering periods of 1980-2011. The unit root and Co-integration tests were conducted and Error Correction Mechanism (ECM) was employed. The results show that public investment in education maintains a positive long run relationship with economic growth while the school enrolments and real capital investment exhibit long run negative relationship with economic growth. The study therefore, among others recommends that the policy makers should pay more attention to education sector in terms of its yearly allocations and disbursement, also put in place the policy to increase the school enrolment ratio of the population and then invest more in the acquisition of physical capital to stimulate rapid economic growth in Nigeria.

Keywords: public expenditure, intellectual capital, education, real investment, economic growth.