The Effects of Foreign Direct Investment on Human Capital Formation: Case of Addis Ababa Area Manufacturing Firms
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Date
2011
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Addis Ababa University
Abstract
Taking the empirical database and gaps the main objectives of this study was to assess the
impacts of foreign direct investment on human capital formation in Addis Ababa, Ethiopia
manufacturing sectors mainly through basic channels of educational advancement(ED),
training(TR), Research and development (R&D) and skill & knowledge transfer(SK).Therefore,
this empirical study was conducted to understand the impacts of FDIs on human capital
formation Addis Ababa Area Zone. A theoretical foundation was compiled for the study based on
the literature review. The research is cross-sectional field survey. For this study a probability
sampling was used, 351 employees were selected as the sample of the study. Five point likert
scale questionaries’ were adopted and distributed to 351. 336 respondents filled the questioners.
The frequency, descriptive statics and regression analysis were used to analyze the study
hypothesis using SPSS version 23. The results of the study indicated that the factors listed in the
study have a significant effect on human capital formation. Moreover, the results of the study
come up with findings training provided by the foreign firms to the employees is the main
channel of human capital formation done FDI and the level, quality of infrastructure and low
institutional support and linkage comparatively affecting the role of FDIs on human capital
building process.
Key words: Human capital, FDI, Educational advancement, Training, R&D, skill &
knowledge transfer
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Keywords
Human capital, FDI, Educational advancement, Training, R&D, skill & knowledge transfer