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Virtuous Circles? Human Capital Formation, Economic Development and the Multinational Enterprise

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  • Ethan B. Kapstein

Abstract

In recent years, academics and policy makers have emphasised the role of human capital formation in economic development. By creating human capital, countries become more attractive to private investment, both domestic and foreign. And through such investment, countries grow and prosper.Yet the empirical evidence in support of this theory remains elusive. While foreign direct investment (FDI) has multiplied in many countries around the world since the 1980s, its effects on growth are uncertain. Why is that the case?In this paper I argue that political economy pathways exist that may lead countries away from sustained growth. In countries that lack well-developed capital and education markets, many otherwise qualified citizens may be denied the basic skills they need in order to contribute fully to the nation’s economic development. As societies become divided, they become more conflicted, and this conflict dampens growth, irrespective of the level of foreign direct investment ... Au cours des dernières années, chercheurs et décideurs ont insisté sur le rôle de la formation du capital humain dans le développement économique. En créant du capital humain, les pays deviennent plus attractifs pour l’investissement privé, qu’il soit national ou étranger. Et cet investissement apporte croissance et prospérité.Les données empiriques à l’appui de cette théorie sont toutefois ambiguës. Bien que l’investissement direct étranger se soit fortement accru dans nombre de pays depuis les années 80, son effet sur la croissance n’est pas très bien établi. Pourquoi ?Ce Document technique met en évidence des orientations d’économie politique susceptibles d’éloigner les pays d’une croissance durable. En particulier, dans les pays qui n’ont pas un marché bien développé des capitaux et de l’éducation, beaucoup d’individus qualifiés ne trouvent pas les compétences de base dont ils ont besoin pour participer pleinement au développement économique national. A mesure que les sociétés ...

Suggested Citation

  • Ethan B. Kapstein, 2002. "Virtuous Circles? Human Capital Formation, Economic Development and the Multinational Enterprise," OECD Development Centre Working Papers 191, OECD Publishing.
    • Handle: RePEc:oec:devaaa:191-en
    DOI: 10.1787/231858424154
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    Cited by:

    1. Narula, Rajneesh, 2004. "Understanding absorptive capacities in an "innovation systems" context: consequences for economic and employment growth," Research Memorandum 004, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    2. Thierry Mayer, 2006. "Policy Coherence for Development : A Background paper on Foreign Direct Investment," SciencePo Working papers Main hal-01065640, HAL.
    3. Krüger, Ralf & Ahlfeld, Sebastian, 2005. "Ausländische Direktinvestitionen in Entwicklungsländern: Eine überschätzte Wachstumsdeterminante?," Discussion Papers in Development Economics 31, Justus Liebig University Giessen, Institute for Development Economics.
    4. repec:ilo:ilowps:378212 is not listed on IDEAS
    5. repec:hal:wpspec:info:hdl:2441/10184 is not listed on IDEAS
    6. Veasna Kheng & Sizhong Sun & Sajid Anwar, 2017. "Foreign direct investment and human capital in developing countries: a panel data approach," Economic Change and Restructuring, Springer, vol. 50(4), pages 341-365, November.
    7. repec:spo:wpecon:info:hdl:2441/10184 is not listed on IDEAS
    8. Helena Maria Ferreira Rêgo & Celeste Amorim Varum & Anabela Carneiro, 2010. "Empresas Estrangeiras e Capital Humano nos Serviços Intensivos em Conhecimento," Notas Económicas, Faculty of Economics, University of Coimbra, issue 32, pages 06-21, December.
    9. Amir Rahman & Rafi Farooq & Khalid Ashraf Chisti, 2023. "Linear and non-linear linkage between human capital and foreign direct investment inflows into APEC countries: an evidence from panel data," SN Business & Economics, Springer, vol. 3(7), pages 1-25, July.
    10. Narula, Rajneesh. & Marín, Anabel., 2005. "Foreign direct investment spillovers, absorptive capacities and human capital development : evidence from Argentina," ILO Working Papers 993782123402676, International Labour Organization.
    11. repec:hal:spmain:info:hdl:2441/10184 is not listed on IDEAS

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