Human Capital as the Main Determinant of Regional Economic Growth

Abstract

The new growth theory has explained that economic growth was from technology changes as the accumulation of human capital. The accumulation of human capital leads to the efficiency, effectiveness and productivity which encourage the competitiveness. The objective of the study is to explain the new growth theory through the empirical data on regional economy. It analyzes the regional economy empirically in Central Java and Yogyakarta, Indonesia. The study results confirm that human capital can give the main and dominant contribution to encourage the regional micro and macro-economic growths. It means that the accumulated impacts of regional economic growth in human capital are able to give positive energy to increase the regional economic growth and the competitiveness.