n African Journal of Science, Technology, Innovation and Development - Foreign direct investment, firm-level capability and human capital development : evidence based on Kenyan manufacturing industry : general research paper

Volume 4, Issue 4
  • ISSN : 2042-1338
  • E-ISSN: 2042-1346
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This paper uses firm-level survey data of Kenyan manufacturing industry to examine the significance of FDI and firm-level capabilities in human capital development. Similarly, the paper undertakes a detailed descriptive comparison of human capital and other firm-level capabilities generated by both foreign and locally owned firms. The analysis shows that foreign firms generally enjoyed high human capital development and firm-level capabilities than locally owned firms. Empirical evaluation of human capital determinants revealed a statistically significant role played by FDI in determining human capital development in all the firms. Other factors which demonstrated an equally significant role included specific firm level capabilities; process, product, marketing and export performance. Interestingly, basic infrastructure, systemic embeddedness, firm size, labour market conditions and role of government were not statistically significant implying their weak role in human capital stimulation.

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