9 / 2015-08-15 23:38:35

Labor Force Heterogeneity and FDI: Evidence from a Panel Data of 69 Countries

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It is usually neglected by the traditional researches to study the effect mechanism and degree of labor force heterogeneity on FDI location. We therefore analyzed the effect of labor force heterogeneity on FDI from the four dimensions of health, education, wage, and population structure respectively by the empirical approach of applying a panel data of 69 countries from 2000 to 2012. The relevant empirical results show that: (1) health, which is generally overlooked by previous researches, turns out to be an important role which influences FDI location, and higher health level in host country means more FDI inflows; (2) low level of wage in host country is an attractive factor for more FDI inflows; (3) the popularization of secondary education can promote developing country’s FDI inflows, while the popularization of tertiary education does not show significant effect on FDI inflow; (4) as for the structure of population, the FDI inflow is positively correlated with the child dependency ratio, while not significant with the old dependency ratio; (5) there is a more significant effect of labor force heterogeneity on developing countries than developed countries.