Does Human Capital Endowment of FDI Recipient Countries Really Matter? Evidence from Cross-Country Firm Level Data
AbstractThe 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.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6382.
Length: 19 pages
Date of creation: Feb 2012
Date of revision:
Publication status: published in: Review of Development Economics, 2013, 17 (3), 559-570
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Other versions of this item:
- Sumon Bhaumik & Ralitza Dimova, 2012. "Does human capital endowment of FDI recipient countries really matter? Evidence from cross-country firm level data," William Davidson Institute Working Papers Series wp1030, William Davidson Institute at the University of Michigan.
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-21 (All new papers)
- NEP-HRM-2012-03-21 (Human Capital & Human Resource Management)
- NEP-INT-2012-03-21 (International Trade)
- NEP-LAB-2012-03-21 (Labour Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bhaumik, Sumon K. & Dimova, Ralitza, 2011. "Good and Bad Institutions: Is the Debate Over? Cross-Country Firm-Level Evidence from the Textile Industry," IZA Discussion Papers 5471, Institute for the Study of Labor (IZA).
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- Margono, Heru & Sharma, Subhash C., 2006. "Efficiency and productivity analyses of Indonesian manufacturing industries," Journal of Asian Economics, Elsevier, Elsevier, vol. 17(6), pages 979-995, December.
- Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, Springer, vol. 20(2), pages 325-32.
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