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Human Capital, Gender Equality and Foreign Direct Investment: Evidence from OECD Countries

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Abstract

The human capital sector of a country plays a vital role in qualitative direct investments. This study examines the degree to which the mean performance on the mathematics and reading scale, as well as the Gini coefficient on average years of schooling, as distinguished in our panel between the two genders, can influence inward foreign direct investment (FDI). We test these education variables for the period 1960–2010 by placing emphasis on OECD countries. Our regression results suggest that all variables are positively associated with (FDI) flows. Also, there exists the same degree of influence between genders, and our results can provide useful insights for governments and policymakers by promoting gender equality.

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Data Availability

The datasets generated during and/or analysed during the current study are available from the corresponding author on reasonable request.

Notes

  1. Corrected estimates resulting from heteroscedastic residuals are obtained with the robust standard error technique while the variance-inflation factor (VIF) and the condition number (CN) detect possible multicollinearity problems, as used by Greene (2000).

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Correspondence to George Pantelopoulos.

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Appendices

Appendix 1

OECD countries

Australia

France

Korea Rep

Slovenia

Austria

Germany

Luxembourg

Spain

Belgium

Greece

Mexico

Sweden

Canada

Hungary

Netherlands

Switzerland

Chile

Iceland

New Zealand

Turkey

Czech Rep

Ireland

Norway

UK

Denmark

Israel

Poland

USA

Estonia

Italy

Portugal

Finland

Japan

Slovakia

Appendix 2

Variable in abbreviation

Description

Source

MeanperMathsF,M

PISA: mean performance on the mathematics scale, females, males

World Bank

GinicoefschF, M

DHS: Gini coefficient of average years of schooling, age 15 + females, males

World Bank

MeanpeReadF, M

PISA: mean performance on the reading scale females, males

World Bank

FDInetinfBoP

Foreign direct investment, net inflows (BoP, current US$)

World Bank

FDI unctd

FDI net inflows Unctad

UNCTAD

GDPpcon2000US$

GDP per capita (constant 2000 US$)

World Bank

Tradegdp

Trade (% of GDP)

World Bank

Realinterat%

Real interest rate (%)

World Bank

Appendix 3. Correlation Matrixes

Correlation matrix for Table 1

 

Inward FDI

MeanperMathsF

MeanperMathsM

GDPpconus

Trade%gdp

RealIntRate

Inward FDI

1.0000

     

MeanperMathsF

0.4973

1.0000

    

MeanperMathsM

0.4983

0.9999

1.0000

   

GDPpconus

0.5949

0.3915

0.3924

1.0000

  

Trade%gdp

0.4424

0.2978

0.2981

0.3989

1.0000

 

RealIntRate

0.2826

0.288

0.0179

0.1651

0.1918

1.0000

Correlation matrix for Table 1

 

Inward FDI

MeanperMathsF

GDPpconus

Trade%gdp

RealIntRate

Inward FDI

1.0000

    

MeanperMathsF

0.4973

1.0000

   

GDPpconus

0.5949

0.3915

1.0000

  

Trade%gdp

0.4424

0.2978

0.3989

1.0000

 

RealIntRate

0.2826

0.0188

0.1651

0.1918

1.0000

Correlation matrix for Table 1

 

Inward FDI

MeanperMathsM

GDPpconus

Trade%gdp

RealIntRate

Inward FDI

1.0000

    

MeanperMathsM

0.4983

1.0000

   

GDPpconus

0.5949

0.3924

1.0000

  

Trade%gdp

0.4424

0.2981

0.3989

1.0000

 

RealIntRate

0.2826

0.0179

0.1651

0.1918

1.0000

Correlation matrix for Table 2

 

Inward FDI

GinicoefschF

GinicoefschM

GDPpconus

Trade%gdp

RealIntRate

Inward FDI

1.0000

     

GinicoefschF

0.0443

1.0000

    

GinicoefschM

0.0446

0.9998

1.0000

   

GDPpconus

0.5949

 − 0.0691

 − 0.0692

1.0000

  

Trade%gdp

0.4424

 − 0.0339

 − 0.0338

0.3989

1.0000

 

RealIntRate

0.2826

 − 0.0398

 − 0.0399

0.1651

0.1918

1.0000

Correlation matrix for Table 2

 

Inward FDI

GinicoefschF

GDPpconus

Trade%gdp

RealIntRate

Inward FDI

1.0000

    

GinicoefschF

0.0443

1.0000

   

GDPpconus

0.5949

 − 0.0691

1.0000

  

Trade%gdp

0.4424

 − 0.0339

0.3989

1.0000

 

RealIntRate

0.2826

 − 0.0398

0.1651

0.1918

1.0000

Correlation matrix for Table 2

 

Inward FDI

GinicoefschM

GDPpconus

Trade%gdp

RealIntRate

Inward FDI

1.0000

    

GinicoefschM

0.0446

1.0000

   

GDPpconus

0.5949

 − 0.0692

1.0000

  

Trade%gdp

0.4424

 − 0.0338

0.3989

1.0000

 

RealIntRate

0.2826

 − 0.0399

0.1651

0.1918

1.0000

Correlation matrix for Table 3

 

Inward FDI

MeanpeReadF

MeanpeReadM

GDPpconus

Trade%gdp

RealIntRate

Inward FDI

1.0000

     

MeanpeReadF

0.4960

1.0000

    

MeanpeReadM

0.4974

0.9998

1.0000

   

GDPpconus

0.5949

0.3825

0.3853

1.0000

  

Trade%gdp

0.4424

0.2963

0.2953

0.3989

1.0000

 

RealIntRate

0.2826

0.0170

0.0167

0.1651

0.1918

1.0000

Correlation matrix for Table 3

 

Inward FDI

MeanpeReadF

GDPpconus

Trade%gdp

RealIntRate

Inward FDI

1.0000

    

MeanpeReadF

0.4960

1.0000

   

GDPpconus

0.5949

0.3825

1.0000

  

Trade%gdp

0.4424

0.2963

0.3989

1.0000

 

RealIntRate

0.2826

0.0170

0.1651

0.1918

1.0000

Correlation matrix for Table 3

 

Inward FDI

MeanpeReadM

GDPpconus

Trade%gdp

RealIntRate

Inward FDI

1.0000

    

MeanpeReadM

0.4974

1.0000

   

GDPpconus

0.5949

0.3853

1.0000

  

Trade%gdp

0.4424

0.2953

0.3989

1.0000

 

RealIntRate

0.2826

0.0167

0.1651

0.1918

1.0000

Appendix 4. Diagnostic Tests

FDI

F-test

Prob > F

MeanperMathsF

F (4, 395) = 98.54

0.00

MeanperMathsM

F (4, 395) = 98.74

0.00

MeanperMathsF,M

F(5, 394) = 79.93

0.00

GinicoefschF

F (4, 395) = 76.69

0.00

GinicoefschM

F (4, 395) = 76.70

0.00

GinicoefschF, M

F(5, 394) = 136.64

0.00

MeanpeReadF

F (4, 395) = 90.17

0.00

MeanpeReadM

F (4, 395) = 99.32

0.00

MeanpeReadF, M

F (5, 394) = 79.39

0.00

Appendix 5. Breush-Pagan Test for Heteroscedasticity

 

Chi2

Prob > chi2

MeanperMathsF

6.38

0.0115

MeanperMathsM

6.27

0.0123

MeanperMathsF,M

5.69

0.0170

GinicoefschF

10.33

0.0013

GinicoefschM

10.32

0.0013

GinicoefschF, M

10.30

0.0013

MeanpeReadF

6.54

0.0105

MeanpeReadM

6.43

0.0112

MeanpeReadF, M

6.11

0.0135

Appendix 6. Breusch-Godfrey LM Test for Autocorrelation

 

Lags

Chi2

df

Prob > chi2

MeanperMathsF

Lag (1)

185.089

1

0.000

MeanperMathsF

Lag (12)

223.806

12

0.000

MeanperMathsM

Lag (1)

184.895

1

0.000

MeanperMathsM

Lag (12)

223.638

12

0.000

MeanperMathsF,M

Lag (1)

183.445

1

0.000

MeanperMathsF,M

Lag (12)

221.030

12

0.000

GinicoefschF

Lag (1)

208.887

1

0.000

GinicoefschF

Lag (12)

236.642

12

0.000

GinicoefschM

Lag (1)

208.831

1

0.000

GinicoefschM

Lag (12)

236.580

12

0.000

GinicoefschF, M

Lag (1)

208.904

1

0.000

GinicoefschF, M

Lag (12)

236.546

12

0.000

MeanpeReadF

Lag (1)

183.668

1

0.000

MeanpeReadF

Lag (12)

222.937

12

0.000

MeanpeReadM

Lag (1)

183.236

1

0.000

MeanpeReadM

Lag (12)

222.625

12

0.000

MeanpeReadF, M

Lag (1)

184.283

1

0.000

MeanpeReadF, M

Lag (12)

222.266

12

0.000

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Pantelopoulos, G. Human Capital, Gender Equality and Foreign Direct Investment: Evidence from OECD Countries. J Knowl Econ (2023). https://doi.org/10.1007/s13132-023-01343-4

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