Abstract:

This paper examines whether human capital development is potent in the nexus between entrepreneurship and financial deepening, while accounting for institutional quality as control variable, in thirteen selected African economies from 1995-2014. Evidence from the augmented Toda-Yamamoto technique finds that human capital does not have long run causal effect on entrepreneurship, and financial deepening, which suggests low quality human capital for entrepreneurial development. The paper recommends market-based funding for human capital development for quality, creativity, entrepreneurship, and hence financial deepening. Global best-practice institutional governance system would reduce ‘cost to start business’ to encourage entrepreneurship growth.