IS SKILLED LABOR A CATALYST FOR ATTRACTING FOREIGN DIRECT INVESTMENT?

DOI: https://doie.org/10.65985/APER.2026885446

Authors:

MAYEKO Léon

Keywords:

Quality workforce, foreign direct investment inflow, human capital, structural transformation.

Abstract:

The aim of this study was to demonstrate the existence of a possible link between workforce quality and foreign direct investment inflows. We used a panel model to control for the heterogeneity of the observations in their individual dimensions, by taking into account a specific effect assumed to be certain. The results of this fixed-effects model show that FDI inflows are greater in countries where there is a movement of labor from low-productivity to high-productivity economic activities. This movement is possible when the labor force varies in qualitative intensity. It also emerges that an influx of FDI is linked to the ease of cross-border trade, which requires a focus on institutions, particularly those aspects that affect the expense, ease and reliability of doing business in a country.

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