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Does Fdi Diminish Local Education Spending Inequality? An Analysis Of Us Panel Data 1992-2002

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  • Hong ZHUANG

Abstract

A significant education and economic literature worries about the within-state inequality in public school spending, while the studies focus on the impacts of state constitution and political structure. Motivated by the literature and recent research on the effect of FDI on public education provision, this paper is the first to examine the impact of FDI on public school resource inequality within a state empirically. Using the US state-level panel data from 1992 to 2002 and a GMM estimation approach to control for unobservable state fixed-effects, time series issues, and endogeneity, the findings of the paper suggest that a 1-percent increase in the ratio of foreign employment relative to state non-farm employment is associated with the decrease in the within-state public school spending inequality by 5.2 percent on average. Thus, FDI contributes not only to increase jobs at state level but also to diminish inequality in public school spending within the state.

Suggested Citation

  • Hong ZHUANG, 2008. "Does Fdi Diminish Local Education Spending Inequality? An Analysis Of Us Panel Data 1992-2002," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 8(2), pages 51-72.
    • Handle: RePEc:eaa:eerese:v:8:y2008:i:8_11
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    1. Mark E. Doms & J . Bradford Jensen, 1998. "Comparing Wages, Skills, and Productivity between Domestically and Foreign-Owned Manufacturing Establishments in the United States," NBER Chapters, in: Geography and Ownership as Bases for Economic Accounting, pages 235-258, National Bureau of Economic Research, Inc.
    2. David N. Figlio & Bruce A. Blonigen, 2019. "The Effects of Foreign Direct Investment on Local Communities," World Scientific Book Chapters, in: Foreign Direct Investment, chapter 11, pages 369-400, World Scientific Publishing Co. Pte. Ltd..
    3. Robert E. Baldwin & Robert E. Lipsey & J. David Richardson, 1998. "Geography and Ownership as Bases for Economic Accounting," NBER Books, National Bureau of Economic Research, Inc, number bald98-1.
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    2. Chengjuan Xia & Md. Qamruzzaman & Anass Hamadelneel Adow, 2022. "An Asymmetric Nexus: Remittance-Led Human Capital Development in the Top 10 Remittance-Receiving Countries: Are FDI and Gross Capital Formation Critical for a Road to Sustainability?," Sustainability, MDPI, vol. 14(6), pages 1-24, March.

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    More about this item

    Keywords

    Foreign Direct Investment; FDI; Education Finance;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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