Foreign Direct Investment and Country-Specific Human Capital
AbstractWorkers who are educated abroad acquire human capital specific to the country of foreign study (for example, language capital and country-specific knowledge on firm organization and on social system) which makes them more productive than domestically educated workers when both types of workers are employed by subsidiaries of multinational firms headquartered in the country of foreign study. An increase in foreign-educated labor in an FDI-host country thus attracts more FDI from the country of foreign study. We find evidence from bilateral FDI and foreign-student data for 63 countries over the period of 1963-1998 that strongly supports this prediction. Our findings suggest that foreign-educated labor may account for a sizable portion of growth in FDI flows during the sample period.
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Bibliographic InfoPaper provided by Institute of Economic Research, Korea University in its series Discussion Paper Series with number 0705.
Date of creation: 2007
Date of revision:
foreign direct investment; multinational firm; human capital; foreign education; students abroad;
Other versions of this item:
- Jinyoung Kim & Jungsoo Park, 2013. "Foreign Direct Investment And Country-Specific Human Capital," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 198-210, 01.
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F10 - International Economics - - Trade - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-11-10 (All new papers)
- NEP-EDU-2007-11-10 (Education)
- NEP-FDG-2007-11-10 (Financial Development & Growth)
- NEP-HRM-2007-11-10 (Human Capital & Human Resource Management)
- NEP-LAB-2007-11-10 (Labour Economics)
- NEP-MIG-2007-11-10 (Economics of Human Migration)
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