Work

The Effects of FDI on School Enrollment in Developing Countries: New Evidence

Year: 2024

Type: article

Abstract: ABSTRACT Using data on 118 developing countries over the period 1973 to 2019, this paper finds that FDI stocks have positive effects on school enrollment rates. The magnitude of the effects is modest. They are larger at the tertiary than at the secondary level. At both levels of education, females benefit more than males. The paper also explores the channels through which FDI might affect enrollment rates and finds that a well‐developed financial sector enhances the positive effects of FDI on schooling. In contrast to almost the entire literature, the paper uses data on stocks rather than inflows of FDI. FDI stocks are more likely to affect schooling decisions because they are much larger and less volatile than FDI inflows. Indeed, the paper finds that FDI inflows do not affect enrollment rates. Throughout, it accounts for endogeneity of FDI and controls for all major determinants of schooling.

Source: Review of Development Economics

DOI: 10.1111/rode.13167

Author: Horst Feldmann

Institution: University of Bath

Language: English

Topic: International Business and FDI

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Quality education, Reduced inequalities, Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $3,190