EIJS Working Papers Series
No 167:
Human Capital and Inward FDI
Magnus Blomström ()
and Ari Kokko ()
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.
Keywords: MNCs; FDI; Spillovers; (follow links to similar papers)
JEL-Codes: J23; O12; (follow links to similar papers)
24 pages, January 1, 2003
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