This paper aimed at exploring the relationship between FDI growth and human capital development in the indian context. A bidirectional causality between them was hypothesised. Besides, the impact of four other macroeconomic variables, namely WPI inflation, real GDP growth, and growth in exports and imports, on FDI growth was examined. The results showed that though human capital development did not facilitate FDI growth, the latter had an impact on the former defined as percentage changes in All Indian Student Enrolment and Expenditure on Higher Edu-cation. Amongst the macroeconomic variables, inflation was found to contribute most significantly to FDI inflow. However, a positive impact of inflation on FDI growth indicated that inflation might have been viewed as a factor that would boost the profits of the MNCs, rather than offering economic instability.
Results based on correlation coefficients indicated that the number of primary, middle and higher secondary schools might have played some role in determining FDI destination across 16 zones consisting of the states and the union territories during 2010-2011. Similarly, for these zones, the amount of FDI inflow during 2010-2011 had significant correlation coefficients with respect to the number of high schools and colleges for professional education. However, the number of universities and other institutes of higher education did not seem to have a significant impact in determining zonal distribution of FDI inflows. With respect to enrolments in different PG programmes, FDI inflows appeared to have significant influence on PG commerce followed by Ph.D./M.Phil. Enrolments in PG Medicine and undergraduate programmes did not have any significant correlation with FDI inflows.
This paper aimed at exploring the relationship between FDI growth and human capital development in the indian context. A bidirectional causality between them was hypothesised. Besides, the impact of four other macroeconomic variables, namely WPI inflation, real GDP growth, and growth in exports and imports, on FDI growth was examined. The results showed that though human capital development did not facilitate FDI growth, the latter had an impact on the former defined as percentage changes in All Indian Student Enrolment and Expenditure on Higher Edu-cation. Amongst the macroeconomic variables, inflation was found to contribute most significantly to FDI inflow. However, a positive impact of inflation on FDI growth indicated that inflation might have been viewed as a factor that would boost the profits of the MNCs, rather than offering economic instability.
Results based on correlation coefficients indicated that the number of primary, middle and higher secondary schools might have played some role in determining FDI destination across 16 zones consisting of the states and the union territories during 2010-2011. Similarly, for these zones, the amount of FDI inflow during 2010-2011 had significant correlation coefficients with respect to the number of high schools and colleges for professional education. However, the number of universities and other institutes of higher education did not seem to have a significant impact in determining zonal distribution of FDI inflows. With respect to enrolments in different PG programmes, FDI inflows appeared to have significant influence on PG commerce followed by Ph.D./M.Phil. Enrolments in PG Medicine and undergraduate programmes did not have any significant correlation with FDI inflows.
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