Summary: HUMAN CAPITAL FORMATION AND FOREIGN DIRECT INVESTMENT IN DEVELOPING COUNTRIES

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BIBLIOGRAPHY - E-COMMERCE FOR DEVELOPMENT: PROSPECTS AND POLICY ISSUES - By OECD Development Centre

This paper synthesises the existing literature on human capital formation and
foreign direct investment (FDI) in developing countries. The aim is to take a bird’s eye
view of the complex linkages between the activities of multinational enterprises (MNEs)
and policies of host developing countries. In doing so, general trends, best practices and
policy experiences are extracted to evaluate the current state of knowledge. The
literature indicates that a high level of human capital is no doubt one of the key
ingredients for attracting FDI, as well as for host countries to gain maximum benefits
from their activities. Most developing countries, however, underinvest in human capital,
and the investment that is actually taking place is unevenly distributed across countries
and regions that have adopted different human resource development (HRD) policies. To
improve human capital formation and thus to attract more FDI would therefore require a
more coherent approach that takes host country constraints such as limited budgetary
resources into account. One such approach is to provide strong incentives for MNEs and
Investment Promotion Agencies (IPAs) to participate in formal education and vocational
training even for workers employed by domestic firms. This allows HRD to be flexible and
demand-driven. Another policy option is to facilitate HRD for small- and medium-sized
domestic enterprises which usually do not invest sufficiently in training of employees
although these enterprises stand to gain most from education and training. In addition,
FDI promotion policies can target high value-added MNEs that are more likely to bring
new skills and knowledge to the economy that can be tapped by domestic enterprises.
Lastly, it is important that key components of HRD policies, i.e. formal schooling and
vocational education and training policies (post-formal schooling) are well co-ordinated
so as to equip students with knowledge and skills that will later be complimentary to
training opportunities provided in the labour market.

OECD DEVELOPMENT CENTRE
Working Paper No. 211
HUMAN CAPITAL FORMATION
AND FOREIGN DIRECT INVESTMENT
IN DEVELOPING COUNTRIES
by
Koji Miyamoto

Preface: HUMAN CAPITAL FORMATION AND FOREIGN DIRECT INVESTMENT IN DEVELOPING COUNTRIES

Questions Posed: HUMAN CAPITAL FORMATION AND FOREIGN DIRECT INVESTMENT IN DEVELOPING COUNTRIES

HUMAN CAPITAL FORMATION BY MNES AND TECHNOLOGY TRANSFERS

THE VIRTUOUS CIRCLE OF HUMAN CAPITAL FORMATION, INWARD FDI, AND TECHNOLOGY TRANSFERS

HUMAN RESOURCE DEVELOPMENT AND ATTRACTING INWARD FDI

Do MNEs Train More than Domestic Firms?

Attracting Service Sector MNEs

Prospects of Human Capital in the Future: Background

Introduction: HUMAN CAPITAL FORMATION AND FOREIGN DIRECT INVESTMENT IN DEVELOPING COUNTRIES

Trends in FDI in Developing Countries: Background

CONCLUSION: HUMAN CAPITAL FORMATION AND FOREIGN DIRECT INVESTMENT IN DEVELOPING COUNTRIES

BIBLIOGRAPHY: HUMAN CAPITAL FORMATION AND FOREIGN DIRECT INVESTMENT IN DEVELOPING COUNTRIES

Introduction: Human Capital and Economic Development

VII F. Attract Capital Flows and Encourage Foreign Participation: PROMOTING STOCK MARKET DEVELOPMENT IN AFRICA

Does Availability of Educated Workers Increase Enterprise Training?

Human Capital Formation by MNEs and Domestic Firms: Determinants of Enterprise Training

Expenditure Composition and Growth

The role of human and physical capital in growth: The Effects of Human Capital on Economic Development

Human Capital Formation by MNEs: Supporting Formal Education

Trends in Human Capital Formation in Developing Countries: Background

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BIBLIOGRAPHY - E-COMMERCE FOR DEVELOPMENT: PROSPECTS AND POLICY ISSUES - By OECD Development Centre

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Created in 1962 by the Organisation for Economic Co-operation and Development (OECD) in Paris, the Development Centre is an interface between OECD Member countries and the emerging and developing economies. The Development Centre occupies a unique place within the OECD and in the international community. It is a forum where countries come to share their experience of economic and social development policies. The Centre contributes expert analysis to the development policy debate. The objective is to help decision makers find policy solutions to stimulate growth and improve living conditions in developing and emerging economies.
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Summary: HUMAN CAPITAL FORMATION AND FOREIGN DIRECT INVESTMENT IN DEVELOPING COUNTRIES

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