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Human Capital and Inward FDI

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Author Info
Blomström, Magnus () (European Institute of Japanese Studies)
Kokko, Ari () (European Institute of Japanese Studies)

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Abstract

After a review of the literature, we conclude that there is potential for significant “spillover effects” from FDI into host countries. However, we identify some limitations of this potential to do with the stock of human capital, the interest in local firms of promoting skills transfer and the competition environment. We suggest comparing conditions and effects between regions, particularly between East Asia and Latin America, where transfer in the former has been more consistent than in the latter. We propose further that an analysis of the type of FDI flowing to different regions and countries could provide clues to the potential for maximising the gains to local skills accumulation. Finally, studies are needed which examine the nature of skills provided by FDI, and ways in which training institutions, business schools, for example, can complement in-service training by firms in FDI host countries.

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Paper provided by The European Institute of Japanese Studies in its series EIJS Working Paper Series with number 167.

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Length: 24 pages
Date of creation: 01 Jan 2003
Date of revision:
Handle: RePEc:hhs:eijswp:0167

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Related research
Keywords: MNCs; FDI; Spillovers;

Other versions of this item:

Find related papers by JEL classification:
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
  3. Hill, Hal, 1982. "Vertical Inter-Firm Linkages in LDCs: A Note on the Philippines," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 44(3), pages 261-71, August.
  4. Magnus Blomstrom & Ari Kokko & Mario Zejan, 1995. "Host Country Competition and Technology Transfer by Multinationals," NBER Working Papers 4131, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Blomstrom, Magnus & Persson, Hakan, 1983. "Foreign investment and spillover efficiency in an underdeveloped economy: Evidence from the Mexican manufacturing industry," World Development, Elsevier, vol. 11(6), pages 493-501, June. [Downloadable!] (restricted)
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    Other versions:
  21. Haddad, Mona & Harrison, Ann, 1993. "Are there positive spillovers from direct foreign investment? : Evidence from panel data for Morocco," Journal of Development Economics, Elsevier, vol. 42(1), pages 51-74, October. [Downloadable!] (restricted)
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    Other versions:
  25. Gershenberg, Irving, 1987. "The training and spread of managerial know-how, a comparative analysis of multinational and other firms in Kenya," World Development, Elsevier, vol. 15(7), pages 931-939, July. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Priit Vahter, 2004. "The Effect Of Foreign Direct Investment On Labour Productivity: Evidence From Estonia And Slovenia," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 32, Faculty of Economics and Business Administration, University of Tartu (Estonia). [Downloadable!]
  2. Faini, Riccardo, 2004. "Trade Liberalization in a Globalizing World," IZA Discussion Papers 1406, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. Ana Teresa Tavares & Aurora A.C. Teixeira, 2006. "Is Human Capital a Significant Determinant of Portugal’s FDI Attractiveness?," FEP Working Papers 211, Universidade do Porto, Faculdade de Economia do Porto. [Downloadable!]
  4. Priit Vahter & Jaan Masso, 2006. "Home versus Host Country Effects of FDI: Searching for New Evidence of Productivity Spillovers," William Davidson Institute Working Papers Series 820, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
    Other versions:
  5. Ana Teresa Tavares & Aurora A. C. Teixeira, 2005. "Human Capital Intensity in Technology-Based Firms Located in Portugal: Do Foreign Multinationals Make a Difference?," FEP Working Papers 187, Universidade do Porto, Faculdade de Economia do Porto. [Downloadable!]
  6. Marin, Anabel & Sasidharan, Subash, 2008. "The Heterogeneity of MNC' Subsidiaries and Technology Spillovers: Explaining positive and negative effects in emerging economies," UNU-MERIT Working Paper Series 066, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
  7. Riccardo Faini, 2004. "Trade liberalization in a globalizing world," Development Working Papers 192, Centro Studi Luca d\'Agliano, University of Milano. [Downloadable!]
  8. Priit Vahter, 2005. "The Effect of Foreign Direct Investment on Labour Productivity: An Overview of an Empirical Study of Estonia and Slovenia," Working Papers 123, School of Economics and Business Administration, Tallinn University of Technology. [Downloadable!]
  9. Michel, Julie, 2007. "The effects of FDI in R&D on home countries, the case of Switzerland," MPRA Paper 6400, University Library of Munich, Germany. [Downloadable!]
  10. Anabel Marin & Martin Bell, 2006. "Technology spillovers from Foreign Direct Investment (FDI): the active role of MNC subsidiaries in Argentina in the 1990s," The Journal of Development Studies, Taylor and Francis Journals, vol. 42(4), pages 678-697, May. [Downloadable!] (restricted)
  11. Della Temenggung, 2007. "Productivity Spillovers from Foreign Direct Investment: Indonesian Manufacturing Industry’s Experience 1975-2000," DEGIT Conference Papers c012_048, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
  12. Sandrine Levasseur, 2006. "Convergence and FDI in an enlarged EU: what can we learn from the experience of cohesion countries for the CEECS?," Documents de Travail de l'OFCE 2006-12, Observatoire Francais des Conjonctures Economiques (OFCE). [Downloadable!]
  13. Priit Vahter, 2005. "Which Firms Benefit More From Inward Foreign Direct Investment?," Bank of Estonia Working Papers 2005-11, Bank of Estonia, revised 10 Oct 2005. [Downloadable!]
  14. Juan Piñeiro Chousa, & Krishna Chaitanya, & Bitzenis P. Aristidis & Artur Tamazian, 2008. "Determinants Of Barries To Quality Of Direct Foreign Investments – Evidences From South & East Asian Economies," William Davidson Institute Working Papers Series wp910, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  15. Marcella Alsan & David E. Bloom & David Canning, 2004. "The Effect of Population Health on Foreign Direct Investment," NBER Working Papers 10596, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  16. Jaan Masso & Raul Eamets & Kaia Philips, 2004. "Firm Demographics And Productivity Dynamics In Estonia," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 25, Faculty of Economics and Business Administration, University of Tartu (Estonia). [Downloadable!]
  17. Masso, Jaan & Eamets, Raul & Philips, Kaia, 2004. "Creative Destruction and Transition: The Effects of Firm Entry and Exit on Productivity Growth in Estonia," IZA Discussion Papers 1243, Institute for the Study of Labor (IZA). [Downloadable!]
  18. A. N. Rambaldi & Iyer & K., 2004. "Measuring Spillovers from Alternative Forms of Foreign Investment," Econometric Society 2004 Australasian Meetings 149, Econometric Society. [Downloadable!]
    Other versions:
  19. Krishna G. Iyer & Alicia N. Rambaldi & Kam Ki Tang, 2005. "Measuring Efficiency externalities from Trade and Alternative Forms of Foreign Investment," CEPA Working Papers Series WP042005, School of Economics, University of Queensland, Australia. [Downloadable!]
  20. Anneli Kaasa, 2005. "Factors Of Income Inequality And Their Influence Mechanisms: A Theoretical Overview," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 40, Faculty of Economics and Business Administration, University of Tartu (Estonia). [Downloadable!]
  21. Anabel Marin & Elisa Giuliani, 2007. "Global and local knowledge linkages: the case of MNE subsidiaries in Argentina," SPRU Electronic Working Paper Series 155, University of Sussex, SPRU - Science and Technology Policy Research. [Downloadable!]
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