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Human Capital and FDI Inflows to Developing Countries: New Empirical Evidence

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Noorbakhsh, Farhad, Paloni, Alberto, Youssef, Ali·2001·World Development
DOI 10.1016/s0305-750x(01)00054-7
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Abstract

Abstract Despite the dramatic increase in total foreign direct investment (FDI) flows to developing countries in the last few years, the bulk of the inflows has been directed to only a limited number of countries. It has been argued that developing countries might enhance their attractiveness as locations for FDI by pursuing policies that raise the level of local skills and build up human resource capabilities. Nevertheless, the empirical evidence in the literature in support of this recommendation for a large sample of developing countries is scant. This paper evaluates this argument in the light of the evolution in the structural characteristics of FDI and empirically tests the hypothesis that the level of human capital in host countries may affect the geographical distribution of FDI. The empirical findings are: (a) human capital is a statistically significant determinant of FDI inflows; (b) human capital is one of the most important determinants; and (c) its importance has become increasingly greater through time.

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Metadata

Authors
Noorbakhsh, F., Paloni, A., & Youssef, A.
Venue
World Development
Publisher
Elsevier BV
Published
2001-09
Volume
29
Issue
9
Pages
1593-1610
ISSN
0305-750X (ISSN-L)
DOI
10.1016/s0305-750x(01)00054-7
OpenAlex
W1966423186
Cited by
978
References
1
FWCI
61.39
Type
journal article
Language
en
Open access
green
Licence
www.elsevier.com/tdm/userlicense/1.0/ (tdm)

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Noorbakhsh, F., Paloni, A., & Youssef, A. (2001). Human Capital and FDI Inflows to Developing Countries: New Empirical Evidence. World Development. https://doi.org/10.1016/s0305-750x(01)00054-7

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