Education, economy and european building. New Challenges derived from the Influence of Psychic Distance in Education on the Direct Foreign Investment Flows from the South to the East of Europe

Abstract

Within the context of the enlargement of the European Union, the present work shows the results of fan investigation undertaken to determine the implications in the European building and in the educational policy of particular issues when economy and education meet, such as the relationship between psychic distance in education and flows of direct foreign investment. By using a panel data technique on a sample of investments from the South of Europe aimed at the new members of the European Union, we demonstrate that a positive relation exists, which means that these investments are characterized by an efficiency-seeking approach and low educational requirements. The conclusions drawn underline the relevance of education as an instrument of convergence in the European building and of the appropriate pedagogic structures to qualify a country’s workforce paying attention to both the current economic needs and the concerns about avoiding a possible dependence situation from investments that would generates few favourable spillovers for the host country.