Human Capital and FDI in Central and Eastern Europe

• Main Authors: Agnieszka Dorozynska, Tomasz Dorozynski
• Format: Article
• Language: English
• Published: University of Primorska 2015-06-01
• Series: Managing Global Transitions
• Subjects: human capital; FDI; CEE countries; Lodz Region
• Online Access: http://www.fm-kp.si/zalozba/ISSN/1581-6311/13_151-170.pdf
• ISSN: 1581-6311; 1854-6935

The aim of this paper is to assess the role of human capital in attracting FDI in the light of selected empirical studies conducted in Poland and globally. The literature on factors determining FDI location, including those relating to the importance of human capital, is dominated with studies at national or supranational level. Attracting foreign investment has become a key component of national strategies for the CEE countries. The paper makes an attempt to assess the relevance of human capital for FDI inflow at regional and local levels in Poland. At the same time, results of analyses were contrasted with quantitative surveys conducted in Central and Eastern Europe. Investing in education and human capital is important for creating good climate for investment. Evidence shows that achieving a certain minimum level of education is the precondition for a country to attract and maintain foreign direct investment and maximise indirect effects connected with human capital and resulting from the presence of businesses with foreign capital and maximise indirect effects connected with human capital and resulting from the presence of businesses with foreign capital. We should also stress that such a minimum is different for different sectors of the economy. Results of the study conducted in the Lodz Region demonstrated that human capital is an important factor, which attracts FDI to the region.