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Gender Disparity in Education and the International Competition for Foreign Direct Investment

Author

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  • Matthias Busse
  • Peter Nunnenkamp

Abstract

With few exceptions, the empirical literature on foreign direct investment (FDI) continues to be gender blind. This paper contributes to filling this gap by assessing the importance of gender inequality in education as a determinant of FDI. The authors estimate a standard gravity model on bilateral FDI flows that is augmented by educational variables, including different measures of gender inequality in education. The analysis covers an unprecedented number of both host and source countries of FDI, thereby reducing the risk of distorted results because of a sample selection bias. The results support the view that foreign investors are more likely to favor locations where education-related gender disparities are small. However, the discouraging effects of gender disparity on FDI are restricted to middle-income (rather than low-income) developing host countries and to investors from developed (rather than developing) countries.

Suggested Citation

  • Matthias Busse & Peter Nunnenkamp, 2009. "Gender Disparity in Education and the International Competition for Foreign Direct Investment," Feminist Economics, Taylor & Francis Journals, vol. 15(3), pages 61-90.
  • Handle: RePEc:taf:femeco:v:15:y:2009:i:3:p:61-90
    DOI: 10.1080/13545700802528315
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    References listed on IDEAS

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    1. Remco H. Oostendorp, 2009. "Globalization and the Gender Wage Gap," World Bank Economic Review, World Bank Group, vol. 23(1), pages 141-161, January.
    2. Assaf Razin & Efraim Sadka, 2007. "Introduction to Foreign Direct Investment: Analysis of Aggregate Flows," Introductory Chapters,in: Foreign Direct Investment: Analysis of Aggregate Flows Princeton University Press.
    3. Robert E. Lipsey, 2002. "Home and Host Country Effects of FDI," NBER Working Papers 9293, National Bureau of Economic Research, Inc.
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    Citations

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    Cited by:

    1. Niklas Potrafke & Heinrich Ursprung, 2011. "Globalization and Gender Equality in Developing Countries," Working Paper Series of the Department of Economics, University of Konstanz 2011-33, Department of Economics, University of Konstanz.
    2. Potrafke, Niklas & Ursprung, Heinrich W., 2012. "Globalization and gender equality in the course of development," European Journal of Political Economy, Elsevier, vol. 28(4), pages 399-413.
    3. MichaƂ Brzozowski, 2013. "Gender Equality as the Determinant of FDI Flows to Central European Countries," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 33.
    4. Kleemann, Linda & Nunnenkamp, Peter & Thiele, Rainer, 2014. "Gender inequality, female leadership, and aid allocation: A panel analysis of aid for education," WIDER Working Paper Series 010, World Institute for Development Economic Research (UNU-WIDER).
    5. Stephanie Seguino, 2013. "From micro-level gender relations to the macro economy and back again," Chapters,in: Handbook of Research on Gender and Economic Life, chapter 20, pages 325-344 Edward Elgar Publishing.
    6. Peter Nunnenkamp, 2010. "How Global is Foreign Direct Investment and What Can Policymakers Do About It? Stylized Facts, Knowledge Gaps, and Selected Policy Instruments," Chapters,in: The Shape of the Division of Labour, chapter 2 Edward Elgar Publishing.

    More about this item

    Keywords

    Foreign direct investment; gender inequality; education; JEL Codes: F23; I21; J16;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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