Assessing the Impact of Foreign Direct Investment on Human Capital Development in India: 1995-2014

Abstract

India is pursuing foreign direct investment in a big way to achieve higher economic growth and development. The basic motive of such growth is development of human capital. Given that FDl interacts with both economic growth and human capital development in the host country, it is essential to study the impact o f FDl on human capital development for India. This study uses an econometric time series model for the period 1995-2014 to show that FDl offers a development potential and contributes to the host countrya human capital development. The results indicate that FDl has a small but statistically significant positive impact on human capital development.