The role of human capital, stakeholder intervention, and infrastructure development in attracting foreign direct investment: Evidence from Chad

Abstract

Despite sustained governmental efforts to attract Foreign Direct Investment (FDI), Chad continues to record low inflows due to structural constraints, notably weak human capital development, inadequate infrastructure, and limited stakeholder coordination. Empirical evidence on the determinants of FDI in Chad remains limited, particularly from a theory-driven perspective. Drawing on the Resource-Based View (RBV) and Human Capital Theory, this study examines the effect of human capital, stakeholder intervention, and infrastructure development on FDI attraction in Chad. A quantitative research design was employed, with data collected from 417 senior managers, directors, and executives of foreign-owned firms operating in N’Djamena, the capital of Chad, using a purposive sampling technique. Top management respondents were selected because of their strategic role in investment decisions and direct exposure to host-country resource conditions. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings indicate that human capital, stakeholder intervention, and infrastructure development have positive and statistically significant effects on FDI attraction in Chad. The structural model explains a substantial proportion of the variance in FDI attraction (R² = 0.566). Stakeholder intervention emerges as the strongest predictor, exhibiting a moderate effect, while human capital and infrastructure development display smaller but statistically significant effects. These findings are consistent with RBV, which emphasizes the role of country-specific resources and institutional capabilities, and Human Capital Theory, which highlights the importance of workforce skills in foreign investment decisions. This study contributes to the limited empirical literature on FDI in Central Africa, particularly in the context of Chad, by providing theory-grounded and empirically robust evidence from a fragile economy. It also offers practical insights for policymakers, development agencies, and investors seeking to strengthen Chad’s investment climate through strategic resource development and enhanced stakeholder coordination.