International Outsourcing, Human Capital Development and Economic Growth in Asia- Pacific Countries

The objective of this research is to explore the effect of international outsourcing on economic growth in Asia-Pacific countries. Accordingly, a panel regression model based on Soderbom and Teal (2003) is estimated using data of the considered countries over the period 1995-2006. In addition to international outsourcing, the model includes human capital, labor force and physical capital as the other exploring variables. Empirical results show that human capital has a significant and positive effect on economic growth of Asia- Pacific countries. Additionally, the cross effect of international outsourcing and human capital on growth has been statistically significant. Hence, investing in human resources, skill promotion and technology improvement are the main keys of trade expansion and economic growth in the countries under consideration.