WHICH FOREIGN FIRMS DO MORE TO TRAIN AFRICAN WORKERS AND WHY?

Africa’s lack of economic development is closely related to its paucity of human capital, defined broadly as the unique abilities and skills of individuals. Traditional education and government-led training, while effective in certain settings, are not the only means to develop human capital. This study investigates the training of workers by foreign private firms in Africa to better understand which firms carry out such training and why. Using a unique survey by UNIDO, it measures the extent to which enterprise-based training by 1,216 foreign firms operating in 15 sub-Saharan African countries is correlated with other characteristics of those firms and the host country. I find that the level of human capital in the host country, industrial sector, investor’s region of origin, as well as the importance of government-provided services are statistically significant and positively associated with firm training. Based on these findings, I suggest a more proactive role for Investment Promotion Agencies in courting firms from certain sectors and regions, ii