THE ROLE OF FOREIGN DIRECT INVESTMENT IN HIGHER EDUCATION IN THE DEVELOPING COUNTRIES

This paper studies the impact of FDI inflows on higher education in developing countries for the period 1998-2008. A large panel of developing countries is analyzed using different econometric techniques and specifications. We find evidence of short-term negative effects of FDI on tertiary education measured by school enrolment. The negative effect of FEY is confirmed for both secondary and tertiary education when measured in terms of adult educated population. GDP, demographic growth and the services sector value added seem to have a significant impact on higher education. GDP and services value-added show the expected positive impact, while population growth has a negative impact on education enrolment and attainment.