Published : 2023-03-30

The role of human capital in the relationship between foreign direct investment and exports in the Association of Southeast Asian Nations

Hong Thu Nguyen



Abstract

Foreign direct investment (FDI) plays a vital role in capital formation and is also an indispensable factor in economic growth in developing countries. While human capital is an important resource for the production process, this capital includes skills, knowledge, and experience in the working and learning process of employees. The research objective is to investigate the role of human capital in the relationship between FDI and exports (EXP) in the Association of Southeast Asian Nations (ASEAN). The present study used the Pooled Ordinary Least Squares model, the fixed effects model and the random effects model to analyse balanced panel data from nine ASEAN countries in the period from 1990 to 2020. The research results show that FDI has a positive and significant impact on EXP in ASEAN countries. At the same time, human capital plays a moderating role in the relationship between FDI and exports in ASEAN countries. From the findings of this study, several recommendations to boost the absorption capacity of FDI in order to increase exports in ASEAN countries are proposed.

Keywords:

exports, foreign direct investment, human capital, moderator, trade



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Nguyen, H. T. (2023). The role of human capital in the relationship between foreign direct investment and exports in the Association of Southeast Asian Nations. Forum Scientiae Oeconomia, 11(1), 149–164. https://doi.org/10.23762/FSO_VOL11_NO1_8

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