The effect of population health on foreign direct investment inflows to low- and middle-income countries

• DOI: 10.1016/j.worlddev.2005.09.006
• Publication Date: 2006-02-11T07:14:40Z
• Authors: Marcella Alsan; David E. Bloom; David Canning
• Keywords: Gross national income; Investment

This paper investigates the effect of population health on gross inflows of foreign direct investment (FDI). We conduct a panel data analysis of 74 industrialized and developing countries over 1980-2000. Our main finding is that gross inflows of FDI are strongly and positively influenced by population health in low- and middle-income countries. Our estimates suggest that raising life expectancy by one year increases gross FDI inflows by 9%, after controlling for other relevant variables. These findings are consistent with the view that health is an integral component of human capital for developing countries.