Arbeitspapier

African leaders: Their education abroad and FDI flows

Leaders are critical to a country's success. They can influence domestic policy via specific measures that they enforce, and they can also influence international public opinion towards their country. Foreign Direct Investments are also essential for a country's economic growth. Our hypothesis is that foreign-educated leaders attract more FDI to their country. Our rationale is that education obtained abroad encompasses a whole slew of factors that can make a difference in FDI flows when this foreign-educated individual becomes a leader. We test this hypothesis empirically with a unique dataset that we constructed from several sources, including the Library of Congress and the World Bank. Our analysis of 40 African countries employs the robust technique of conditional quantile regression. Our results reveal that foreign education is a significant determinant of FDI inflows, beyond other standard characteristics. While intuitive, this result does not necessarily indicate sheepskin effects or superior human capital obtained abroad. Rather, it indicates the powerful role of the social capital, networks, and connections that these leaders built while they were abroad that they in turn mobilize and utilize when they become leaders.

Language: Englisch

Bibliographic citation: Series: DIW Discussion Papers ; No. 1087

Classification: Wirtschaft
Multiple or Simultaneous Equation Models: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models
International Investment; Long-term Capital Movements
Analysis of Education

Subject: FDI
Leaders' Educational level
return migration
Africa

Event: Geistige Schöpfung

(who): Constant, Amelie F.
Tien, Bienvenue N.

Event: Veröffentlichung

(who): Deutsches Institut für Wirtschaftsforschung (DIW)

(where): Berlin

(when): 2010

Handle: http://hdl.handle.net/10419/49414

Last update: 10.03.2025, 11:44 AM CET

Data provider

This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.

Show original at data provider

Object type

Arbeitspapier

Associated

Constant, Amelie F.
Tien, Bienvenue N.
Deutsches Institut für Wirtschaftsforschung (DIW)

Time of origin

2010

Other Objects (12)

Arbeitspapier