DOES HUMAN CAPITAL MATTER FOR FDI’S EFFECT ON POVERTY? An Evidence From Nigeria
- Olusegun A. Orija
- Abiodun O. Folawewo
- ( paper pages. 105 - 126 )
Abstract
This paper investigates the impact of foreign direct investment (FDI) on poverty given the role of human capital in Nigeria. A multidimensional poverty index (MPI) approach to measuring poverty was used in which household consumption expenditure, life expectancy and infant mortality were proxied for poverty. Human capital was measured using primary, secondary and tertiary school enrolments. The empirical analysis was done using the Autoregressive Distributed Lag (ARDL) approach, over annual time series datacovering 1980-2018. Results reveal that the interaction of FDI and all the school enrolments had a significant reducing effect on povertywhen household consumption expenditure was used. However, when poverty was measured by life expectancy, only the interactive terms of FDI with primary school and secondary school enrolments reduced poverty significantly, while the interaction of tertiary schoolenrolment and FDI did not. The effect of the interaction of FDI and the different measures of human capital on poverty was mixed andambiguous when infant mortality was used. Based on the finding, it is evident that human capital matters for FDI's effect on poverty, andthis effect is sensitive to the proxy used for poverty in Nigeria. Therefore, government should improve the quality as well as theefficiency of human capital in the country.
Citation
Olusegun A. Orija, Abiodun O. Folawewo.
2021.
"DOES HUMAN CAPITAL MATTER FOR FDI’S EFFECT ON POVERTY? An Evidence From Nigeria"
The Nigerian Journal of Economic and Social Studies,
63 (1): 105 - 126.
JEL Classification
F21, J24, I32
