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Is Human Capital a Significant Determinant of Portugal’s FDI Attractiveness?

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  • Ana Teresa Tavares

    ()
    (CEMPRE, Faculdade de Economia, Universidade do Porto)

  • Aurora A.C. Teixeira

    ()
    (CEMPRE, Faculdade de Economia, Universidade do Porto)

Abstract

The paper tests whether human capital is a relevant foreign direct investment (FDI) determinant. Drawing on a large-scale survey of firms located in Portugal, and controlling for firms’ structural (i.e. size, age and industry), strategic (R&D and export intensities) and linkages (density of university contacts) variables, our key finding is that, indeed, human capital exerts a positive and significant influence on FDI attraction. Relevant policy implications emerge from the results of this study, at two main levels: (i) policies intended to stimulate human capital formation; and (ii) as regards FDI-focused policies. These policies are discussed in the light of the Portuguese case.

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Bibliographic Info

Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number 211.

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Length: 28 pages
Date of creation: May 2006
Date of revision:
Handle: RePEc:por:fepwps:211

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Keywords: Foreign direct investment (FDI); multinational enterprises (MNEs); human capital; education; skills; R&D-performing firms.;

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