A Spatial Econometric Analysis on Economic Rationalization and Human Capital Dynamics in Cambodia

This paper aims to investigate how human capital constraints and geographical constraints impact economic rationalization across 25 provinces in Cambodia using a novel dataset with spatial econometric models. There are many econometrical approaches such as the Ordinary Least Squares model (OLS), the Spatial Autoregressive model (SAR), the Spatial Error model (SEM), and the Principal Component Analysis model (PCA) employed in this research for analysis and assessment. Specifically, some of the crucial variables related to economic rationalization and human capital constraints are assessed, including child nutrition, secondary school dropout rates of male and female students, educational expenses, migration, poverty rates, and access to electricity, water, and toilets. The spatial econometrical methodologies and spatial dependence analysis findings demonstrated that males dropped out of secondary school at a higher rate than females. Additionally, educational expenditure was fairly small based on geographical analysis and assessment. Structurally, according to the migration sector, only a few provinces in Cambodia had more access to electricity, clean water, and flush toilets, and men migrated at higher rates than women. This suggests that when people have higher access to electricity and water, poverty might be eradicated. Moreover, a rationalization analysis of these challenges suggests that Cambodia ought to enforce the spatial policies and embrace different policies according to different locations. Other advanced spatial analyses should use the regionalized analysis and its usefulness to identify the location for policy priorities in Cambodia.