Influence of Quality Education on FDI Inflows in Subs-Saharan Africa: A Theoretical and Empirical Research

Abstract

The non-traditional influences of Foreign Direct Investment (FDI) are increasingly gaining attention in international business studies; however, the empirical evidence of these influences is still scant. Using human capital theory within the context of the national competitive framework, the study reported in this paper considers the progress towards achieving Quality education as a likely influence of FDI inflows in Sub-Saharan Africa (SSA). The paper employs a panel data research design and conducts fixed effects estimations. The analysis categorizes FDI flows into global FDI, FDI from developed countries, and FDI from developing countries to SSA. Thus, the paper is centred around three research questions: (1) How does progress toward quality education influence global FDI inflows? (2) How does progress towards quality education influence FDI inflows from developed and (3) from developing countries? The analysis mainly utilizes a bespoke dataset from the United Nations Conference on Trade and Development (UNCTAD) and data from trustworthy databases such as UNCTADSTAT and the World Development Indicators (WDI). The results support the claim of the increasing importance of non-traditional influences of FDI flow. Quality Education significantly influenced FDI inflows from the globe and developing countries to SSA. This research provides further evidence that the national competitive framework can thoroughly explain the factors that have different significant powers in influencing FDI flows to SSA from developed and developing countries. The study is highly policy-relevant because it examines the effects of the degree of attainment of specific UN Sustainable Development Goals (quality education) on inward FDI performance. It, therefore, shows the benefits of SSA countries investing in the SDGs for the policy goal of attracting more considerable amounts of inward FDI.