Does human capital endowment of FDI recipient countries really matter? Evidence from cross-country firm level data

Sumon Bhaumik, Ralitza Dimova

Research output: Preprint or Working paperDiscussion paper

Abstract

The stylized literature on foreign direct investment suggests that developing countries should invest in the human capital of their labour force in order to attract foreign direct investment. However, if educational quality in developing country is uncertain such that formal education is a noisy signal of human capital, it might be rational for multinational enterprises to focus more on job-specific training than on formal education of the labour force. Using cross-country data from the textiles and garments industry, we demonstrate that training indeed has greater impact on firm efficiency in developing countries than formal education of the work force.
Original languageEnglish
Place of PublicationBonn (UK)
PublisherIZA
VolumeIZA DP No. 6382
Publication statusPublished - Feb 2012

Publication series

NameIZA discussion paper series
PublisherForschungsinstitut zur Zukunft der Arbeit
No.IZA DP No. 6382

Bibliographical note

© The Authors

Keywords

  • human capital
  • training
  • firm-level efficiency
  • multinational enterprises

Fingerprint Dive into the research topics of 'Does human capital endowment of FDI recipient countries really matter? Evidence from cross-country firm level data'. Together they form a unique fingerprint.

Cite this