Investment in personnel and FDI in Belarusian companies

We examine trends in investment in personnel in Belarussian enterprises and the impact they have on companies' capacity to attract FDI and modernise. Others have argued in favour of the economy's robust fundamentals, using macro-level data. They have suggested that Belarussian industry has attracted considerable FDI, due in part to high investment in human capital. Our findings, based on micro-level data from Belarussian enterprises in 2009-2014, demonstrate that investments in personnel have decreased since the global financial crisis and are suboptimal, reducing industry's capacity to attract and retain FDI. Management has limited ability and inclination to address these problems, due to government pressure. We conclude that the model may be becoming less sustainable as a result.