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The Relationship Between Communicable Diseases and FDI Flows: An Empirical Investigation
Author(s) -
Ghosh Sucharita,
Renna Francesco
Publication year - 2015
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/twec.12261
Subject(s) - endogeneity , per capita , economics , ordinary least squares , foreign direct investment , econometrics , population , human capital , demographic economics , macroeconomics , environmental health , medicine , economic growth
This paper focuses on the impact of communicable diseases, which affects the population health component of human capital on worldwide FDI flows. The model controls for endogeneity that can stem from the interconnected relationship between FDI , population health and per capita GDP . After controlling for this endogeneity, we find that communicable diseases have a statistically significant negative effect on FDI , which is 2 to 5 times larger than when using ordinary least squares. The results remain robust to alternative model specifications.