Nonlinear effects of human capital on TFP: Evidence from eight ASEAN countries

The purpose of this paper is to investigate the nonlinear relationship between tfp growth rate and human capital in 8 asean countries over the period from 1990 to 2014. using two-way fixed-effect benhabib-spiegel model,this study finds that human capital,denoting the innovation term,is negatively related with tfp growth rate. meanwhile,the catch-up term,denoted by the interaction between human capital and the technology gap,has a positive effect on tfp growth rate. this study further uses threshold-seeking procedure proposed by hansen (1999) and finds that there are two thresholds in the innovation term and a single threshold in the catch-up term,i.e. in terms of human capital. © 2018,statistical,economic and social research and training centre for islamic countries. all rights reserved.