Does the level of human capital matter for FDI in the Western Balkan countries?

Abstract

AbstractThe purpose of this paper is to investigate the importance of human capital, as location determinant for the foreign direct investment (FDI) decisions in the Western Balkan Countries between 2008 and 2016. Apart from the human capital indicators, several location determinants were used as control variables. The hypothesis has been tested by employing correlation and regression analysis. The empirical findings revealed the positive impact of primary education and the negative impact of tertiary education on the inflows. The analysis showed that political stability and control of corruption are more important location determinants than human capital. Therefore, the policy measures should be directed towards the improvement of institutional framework and creating a supporting environment for the FDI inflows.