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

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. (c) 2006 Elsevier Ltd. All rights reserved.