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Level or Growth, Which is More Important? Influence of Human Capital on Spillovers from Foreign Direct Investment

Author

Listed:
  • Muntasir Mamun Iqbal

    (Department of Economics, North South University, Bangladesh,)

  • Abdul Mumit

    (Department of Economics, North South University, Bangladesh.)

Abstract

The paper examines the spillover benefits of foreign direct investment (FDI) in relation to their contribution to economic growth, by utilizing a cross-country panel framework over the last four decades. The findings suggest that only when the host country has a certain threshold level of human capital, FDI contributes positively to economic growth through technology diffusion. It is also found that in general terms, the growth of human capital, and not the level of human capital, in the host economy interacts more strongly with FDI to produce positive externalities. This indicates that countries can compensate for their lower levels of human capital stock by substituting it with higher rates of human capital growth.

Suggested Citation

  • Muntasir Mamun Iqbal & Abdul Mumit, 2017. "Level or Growth, Which is More Important? Influence of Human Capital on Spillovers from Foreign Direct Investment," International Journal of Economics and Financial Issues, Econjournals, vol. 7(6), pages 154-158.
    • Handle: RePEc:eco:journ1:2017-06-20
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    References listed on IDEAS

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    Cited by:

    1. Bashir Ahmad Joo & Sana Shawl, 2023. "Understanding the Relationship Between Foreign Direct Investment and Economic Growth in BRICS: Panel ARDL Approach," Vikalpa: The Journal for Decision Makers, , vol. 48(2), pages 100-113, June.

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    More about this item

    Keywords

    Human Capital; Technology Spillover; FDI;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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