Regional heterogeneity in the finance-human capital-growth nexus: new evidence from Sub-Saharan Africa

Purpose This study investigates the relationship between financial development (FD), human capital (HC) and economic growth (EG) in Sub-Saharan Africa (SSA). Design/methodology/approach This study employs the novel method of moment quantile regression (MMQR) to assess the heterogeneous associations between FD, HC and EG across the quantiles. Besides, this study utilizes feasible generalized least squares to validate MMQR outcomes. Findings The MMQR outcomes indicate that FD and HC are positively and significantly associated with EG across the lower, medium and upper quantiles in SSA economies. The magnitude of the association for HC is larger than that of FD and increases across the quantiles. The findings also reveal substantial heterogeneity across the SSA regional blocs, suggesting that the finance–human–growth relationship varies by regional structure. Research limitations/implications The findings suggest that FD and HC strategies in SSA should be region-specific rather than uniform. The policymakers should prioritize improving education quality, skills alignment and the efficiency of financial intermediation. The tailored reforms in the financial and education systems reflecting regional structural differences can better support sustainable and inclusive EG in SSA economies. Originality/value This study contributes to the existing body of literature by assessing the heterogeneous relationship between FD, HC and EG in SSA economies, including regional blocs, a dimension that has been largely unexplored in previous research.