This paper examines the effect of the efficiency of the education system on Foreign Direct Investment (FDI). First, it applies a frontierbased measure as a proxy of the ability of countries to optimally convert the average years of schooling into income for individuals. Second, it shows the relationship between the external efficiency of the education system and FDI inflows. The results show that the efficiency level varies across regions and countries and appears to be driven by higher education and secondary vocational education. Similarly to other studies in the literature, there is no significant relationship between the average years of schooling and FDI inflows. However, the external efficiency of the education system is important for FDI inflows. Improving the external efficiency of the education system can play a role in attracting FDI especially in nonresource rich countries, non-landlocked countries and countries in the low and medium human development groups.
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Primary education plays a central role in the Burkinabe school system. Several projects have been launched that contribute to expanding the resources available for basic education in Burkina Faso. However, education systems in the di¤erent administrative regions of Burkina Faso may not all be equally capable of employing the resources they receive to generate signi…cant results. This study uses the data envelopment analysis (DEA) method to assess the e¢ ciency with which basic education is provided throughout the 45 provinces of Burkina Faso. Overall, our results reveal that resources are not used optimally for the provision of basic education in the provinces of Burkina Faso. Moreover, in most of the provinces studied, returns to scale in basic education are decreasing. In order to explain ine¢ ciency scores, we also use the Simar and Wilson (2007) procedure. We …nd that households'living situation can explain e¢ ciency in primary education provision.
This paper examines the effect of the efficiency of the education system on Foreign Direct Investment (FDI). First, it focuses on the external efficiency and applies a frontier-based measure as a proxy of the ability of countries to optimally convert the average years of schooling into income for individuals. Second, it shows the relationship between the external efficiency of the education system and FDI inflows by applying GMM regression technique. The results show that the efficiency level varies across regions and countries and appears to be driven by higher education and secondary vocational education. Similarly to other studies in the literature, there is no significant relationship between the average years of schooling and FDI inflows. However, this study shows that the external efficiency of the education system is important for FDI inflows. Improving the external efficiency of the education system can play a role in attracting FDI especially in non-resource rich countries, nonlandloked countries and countries in the low and medium human development groups.
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