The role and importance of human capital in the economic development: An application for Adana

In the analysis of the 21st century economies, the socio-economic indicators ofcountries have gained more significance. As a result, human capital, which has not receivedthe attention it deserves until the last quarter century, has started to attract more attention.Thus, the increasing importance of human capital, in addition to classical production factors,such as labor, capital, natural resources, and entrepreneurship, in recent years has necessitatedreconsideration of growth and development policies. In this regard, whether a meaningfulrelationship exists between human capital and competition is investigated in the followingthesis. Specifically, an inquiry which consists of 14 questions was developed and used as ameasure of human capital of selected firms in manufacturing in the Adana area. On thedependent variable side, the tax bases of the firms were used as a proxy for competitiveness.In particular, the firms were divided into two groups consisting of firms reporting profits andfirms reporting losses. Such a binary division was needed since no tax base was available forthe firms, reporting losses. Finally, a Probit Model was constructed and used to assess theimpact of human capital indicators on the firms' profit probabilities. The results reveal that ofall the human capital indicators only seniority and female participation increase the profitprobabilities significantly. Also, a textile dummy indicates that the firms in the textile industryhave lower profit probabilities than others.Keywords: Human Capital, Economic Growth, Economic Development, Probit Model.