Challenges in the Era of Globalization - iaabd

Proceedings of the 12th Annual Conference © 2011 IAABD
One such requirement is the quality of labour or human capital. The proxies used to measure human
capital show that this variable is also becoming more significant in the latter periods.
Conclusion
The results of this study have thrown up a number of conclusions:
In the 1980s, many SSA countries were suffering from stagnation and economic and political instability,
for which structural adjustment programmes were implemented as recommended by the World
Bank/IMF. Economic activities of that time were centred on import replacement by domestic
manufactures and the export of mineral resources and agricultural products. FDI during this period was
either natural (mineral) resource seeking or market seeking for import replacement manufactures. Thus,
the significance of Mktsize and Mktgrowth.
In the 1990s, many SSA countries began to recover from slow growth and the impact of adjustment and
economic and investment liberalisation started to show in countries that have implemented the
programme successfully. Variables like Openness, SSER and to a lesser extent, PSTB, became more
prominent in explaining the variations in FDI inflows.
This change is even more significant in magnitude for the 2005 data. This could be the result of a shift in
the mode of FDI to a more efficiency-seeking type, requiring better educated labour, greater openness of
the economy and communication and other infrastructural development. In support of this, Nyuur (2011),
using 2010 survey data for Ghana, showed that the motive for foreign firms investing in Ghana was
mainly market seeking (64%), efficiency seeking (18%) and natural resource seeking (14%). Foreign
investment in Ghana in the 1070s and 1980s was mainly natural resource seeking.
These results could also shed some light into the trade-off between wages and productivity to attract FDI.
They allow us to make predictions based on the level of schooling in a country.
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