 Does Population Longevity Attract Foreign Direct Investments in Developing Countries?Ayona Bhattacharjee Global Business Review, 2023, vol. 24, issue 2, 393-410 Abstract: In a seminal paper, Alsan et al. (2006 , World Development , vol. 34, pp. 613–630) investigate the effect of population health on gross foreign direct investment (FDI) flows to the developing countries. The purpose of this article is to extend their work by exploring the causal effect of population longevity on attracting FDI flows to the middle-income countries over a longer and more recent period, while addressing endogeneity concerns through a novel instrumental variable (IV). The IV is constructed on the hypothesis of cross-country health convergence and generates plausibly exogenous variations in measures of longevity. Our IV estimates suggest that 1-year increase in a measure of longevity is likely to increase annual FDI inflows by at least 3 per cent in the sample of countries considered. Specifically, significant returns appear to emerge from increases in the longevity of the female population. In the current context of resurgence of FDI as a critical source of financial capital to the developing countries and the prevalence of frequent disease outbreaks, these results suggest that good health is not an end but a means to enable countries better integrate with the global markets. Keywords: Foreign direct investment; longevity; fixed effects; instrumental variable; developing countries (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:globus:v:24:y:2023:i:2:p:393-410 Access Statistics for this article More articles in Global Business Review from International Management Institute |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.