Asali, Muhammad and Cristobal-Campoamor, Adolfo (2011): Optimal foreign direct investment in the presence of human capital formation.
Download (165kB) | Preview
This paper gives both theoretical arguments and econometric support to the notion of optimal FDI levels, from the viewpoint of human-capital formation in the host country. The optimality of a limited FDI level depends on the local incentives to get trained. Those incentives are formed in the face of uncertainty and asymmetric information between the multinational and its potential workers. Our estimates confirm the significance of a negative, non-linear impact of FDI per capita on tertiary schooling, both in developed and developing countries.
|Item Type:||MPRA Paper|
|Original Title:||Optimal foreign direct investment in the presence of human capital formation|
|Keywords:||FDI; Human-Capital Formation; Education; Skill Heterogeneity|
|Subjects:||F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms; International Business
J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
|Depositing User:||Adolfo Cristobal-Campoamor|
|Date Deposited:||12. Jun 2011 21:43|
|Last Modified:||20. Feb 2013 02:48|
Checchi, D., De Simone, G., Faini, R., 2007. Skilled migration, FDI and human capital investment. IZA Discussion Paper No. 2795.
Docquier, F., Rapoport, H., 2007. Skilled migration: the perspective of developing countries. CReAM Discussion Paper No 10/07.
Feenstra, R., Hanson, G., 1997. Foreign direct investment and relative wages: evidence from Mexico's maquiladoras. Journal of International Economics 42 (1997) 371-393.
Hoffman, A., 2003. Education, trade and investment liberalizations. Journal of International Economics 60 (2003) 433-453.
Lazear, E., Rosen, S., 1981. Rank-order tournaments as optimum labor contracts. Journal of Political Economy, 1981, vol.89, no.5.
Markusen, J., Venables, A., 1999. Foreign direct investment as a catalyst for industrial development. European Economic Review 43 (1999) 335-356.
Mountford, A., 1997. Can a brain drain be good for growth in the source economy? Journal of Development Economics Vol. 53 (1997) 287-303.
Stark, O., Helmenstein, C., Prskawetz, A. (1997). A brain gain with a brain drain. Economics Letters 35 (1997) 227-234.
Zhuang, H. (2008). Foreign direct investment and human capital accumulation in China. International Research Journal of Finance and Economics, Issue 19 (2008).