Open AccessDo Governance, Foreign Direct Investment and Human Capital Matter to Bolster Trade Liberalization? Fresh Insight from Developing Countries
Author(s) -
Muhamad Umar,
Imran Sharif Chaudhry,
Muhammad Faheem,
Fatima Farooq
Publication year - 2021
Publication title -
review of economics and development studies
Language(s) - English
Resource type - Journals
eISSN - 2519-9706
pISSN - 2519-9692
DOI - 10.47067/reads.v7i3.369
Subject(s) - foreign direct investment , human capital , liberalization , corporate governance , international economics , good governance , business , developing country , economics , free trade , international trade , economic growth , market economy , finance , macroeconomics
This study aims to explore the impact of governance, foreign direct investment and human capital on trade liberalization in developing countries (lower income, middle income and upper middle income). The study employed fixed effect for the period of 2000 to 2019. Results show governance, foreign direct investment and human capital are highly significant with trade liberalization in the case of lower-income countries. In the case of middle-income countries, empirical findings demonstrate governance and foreign direct investment are highly significant with a negative sign, while human capital has positive on trade liberalization. In the case of upper-middle-income countries, results show human capital and foreign direct investment affect positively, while governance has a negative effect on trade liberalization. On the behalf of results it is suggested that in the countries where human capital is high, most of the inflows of foreign direct investment happen. It means that the government can develop human resources to attract more foreign direct investments. The governments of developing countries should also concentrate on education, including training facilities and other quality educational facilities for human skill development.