Abstract
This paper examines the influence that the reputation of Zimbabwe’s human capital has as an antecedent of FDI market entry opportunities in the country. By synthesizing nation branding, behavioural finance and foreign direct investment theory, this paper contributes to the growing body of knowledge in human capital as a determinant influencing foreign investor behaviour within an African economic context. Empirical data was generated from a self-administered online survey of a purposively sampled population of 305 foreign investors within the Zimbabwean context. Exploratory factor analysis extracted the items that constituted the Zimbabwean human capital construct, with Cronbach’s alpha coefficients being utilized to measure the reliability of the measuring instrument. Descriptive statistics, Pearson product-moment coefficients and multiple regression analysis were employed to further analyze the data. The results revealed that foreign investors considered the availability of a sustainable, highly productive, skilled, retainable and inexpensive workforce, as the influential human capital attributes they considered for FDI to Zimbabwe. The empirical evidence further affirmed that the reputation of Zimbabwe’s human capital is an antecedent for resource- and efficiency-seeking FDI typologies to Zimbabwe. As a result, practical guidelines are provided for the Government of Zimbabwe and the Zimbabwe Investment Authority on the potential development and promotion of Zimbabwe’s human capital for the purpose of positively influencing investor behaviour, thereby attracting FDI to the country.
Highlights
In 2015, foreign direct investment (FDI) contributed an estimated US$66.9 billion to the African economy, representing 4.2% of the continent’s total gross domestic product (United Nations Economic Commission for Africa, 2015)
Validity and reliability of the measuring instrument: Table 2 summarises the results of the retained Exploratory factor analysis (EFA) items for the Human capital construct, the items that loaded, the Eigenvalue of the construct, as well as the Cronbach’s alpha (α) for the construct
As a result of the EFA and the Cronbach’s alpha coefficient data analyses, the Human capital construct in the Zimbabwean context is characterised by the availability of a low-cost, sustainable, highly productive, skilled workforce, which Zimbabwe has been able to retain
Summary
In 2015, foreign direct investment (FDI) contributed an estimated US$66.9 billion to the African economy, representing 4.2% of the continent’s total gross domestic product (United Nations Economic Commission for Africa, 2015). While there is a plethora of empirical evidence (Anyanwu & Yameogo, 2015; Kariuki, 2015; Kinda, 2010; Zekiwos, 2012), relating to the economic determinants that attract FDI to the African continent, there is a discernible gap in empirical studies exploring the subjective (non-financial) factors influencing FDI to African countries in particular. This dearth in studies on the subjective determinants of FDI extends to the case of Zimbabwe. Human capital is proxied as People within the nation branding context
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