Document Type
Article
Language
eng
Format of Original
13 p.
Publication Date
6-2011
Publisher
Springer
Source Publication
Atlantic Economic Journal
Source ISSN
0197-4254
Abstract
In this paper, we revisit the results from the influential study by Borensztein et al. (Journal of International Economics 45:115–135, 1998), which argues that inward foreign direct investment (FDI) promotes the economic growth in a less developed host country only when the host country obtains a threshold level of secondary schooling. Borensztein et al. (Journal of International Economics 45:115–135, 1998) only focus on the quantity of education. We take into consideration both the quantity and the quality of education. We adjust the original schooling data in Borensztein et al. (Journal of International Economics 45:115–135, 1998) by two quality of education indices and re-estimate their model. We find that the complementarity between inward FDI and schooling still exists, but the threshold level of schooling in our study is lower than the threshold calculated in Borensztein et al. (Journal of International Economics 45:115–135, 1998). Our results support the importance of education quality and suggest that with improved quality of education, it does not take as much quantity of schooling, as established in Borensztein et al. (Journal of International Economics 45:115–135, 1998), for inward FDI to have a positive impact on economic growth in the host country.
Recommended Citation
Wang, Miao and Wong, M. C. Sunny, "FDI, Education, and Economic Growth: Quality Matters!" (2011). Economics Faculty Research and Publications. 116.
https://epublications.marquette.edu/econ_fac/116
Comments
Accepted version.Atlantic Economic Journal, Vol. 39, No. 2 (June 2011): 103-115. DOI.© Springer Verlag 2005. Used with permission.
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