Optimal foreign direct investment in the presence of human capital formation
AbstractThis 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.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 31460.
Date of creation: 11 Jun 2011
Date of revision:
FDI; Human-Capital Formation; Education; Skill Heterogeneity;
Find related papers by JEL classification:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-06-25 (All new papers)
- NEP-HRM-2011-06-25 (Human Capital & Human Resource Management)
- NEP-LAB-2011-06-25 (Labour Economics)
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