Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/34605 
Year of Publication: 
2007
Series/Report no.: 
IZA Discussion Papers No. 2795
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
It is commonly believed that accumulation of human capital (HC) and availability of physical and financial capitals are among the major determinants of economic growth. In a globalised world, where factors of production are increasingly mobile, the process of domestic accumulation of HC might be affected in several ways through migration and capital inflows. Furthermore, endowment of skilled labour and foreign direct investments (FDI) may reinforce each other through possible complementary effects. Our paper aims to advance the existing empirical literature on the relationship between international factor mobility and domestic accumulation of HC in developing countries. We provide new evidence on how the presence of foreign firms in the domestic economy and the emigration of skilled workers impact the domestic school enrolment. We also investigate whether existing supply of skilled labour is a significant determinant of inward flows of foreign capital. The interdependence between factor mobility and HC accumulation supports some simple back-of-the-envelop calculations aiming to investigate the presence of a virtuous (vicious) circle between HC accumulation and FDI inflows.
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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