Impact of FDI on unemployment in transition countries: Panel cointegration approach

Abstract

This paper examines the relationship between FDI inflow per capita and unemployment rates in 17 transition countries over the period [2000][2001][2002][2003][2004][2005][2006][2007][2008][2009][2010][2011][2012][2013][2014]

Do foreign direct investments and bank credits affect employment in Uzbekistan?

“…Usually, capital-intensive industries require primarily skilled workers and generate few jobs per dollar spent (Jenkins, 2006;Mahjabeen and Ataur, 2016). Our findings confirm Jude and Silaghi (2016)'s results on the negative impact of FDIs on employment in the short run, although marginal effects of the FDI alone on employment may not be a sufficient instrument to boost employment (Jude and Silaghi, 2016;Zdravkovic et al, 2017). Likewise, the results corroborate other empirical findings (Bayar, 2014(Bayar, , 2017 on positive impact of FDIs on the unemployment rate.…”

“…Similarly, in the context of 20 Caribbean countries, Craigwell's (2006) study found a positive impact of FDI inflow on the employment rate over the period 1990–2000 (Strat et al , 2015). Balcerzak and Zurek's (2011) study found a negative impact of FDI and unemployment over 1995–2009 (Zdravkovic et al , 2017). In the context of other countries, such as the USA (Ajaga and Nunnenkamp, 2008) and Fiji (Jayaraman and Singh, 2007), studies reported positive effects of inward FDIs on employment in the long run.…”

“…Affecting primarily through the transfer of capital and technology, the FDI can affect productivity since businesses' employment decisions, which influences overall employment, are primarily determined by labor productivity (Mahjabeen and Ataur, 2016). Meanwhile, other empirical studies argue that the FDI is inclined to contribute to economic growth without creation of new jobs (Abiad et al , 2007; Boeri and Garibaldi, 2006; Jude and Silaghi, 2016; Zdravkovic et al , 2017).…”

“…However, empirical studies suggest FDIs are not as effective as theoretical evidence implies. Mkombe et al (2020) and Zdravkovic et al (2017)'s study reported a statistically insignificant impact of FDI on reducing unemployment in the Southern African Development Community region and 17 developing economies. Mkombe (2020) attributed the finding to brownfield investments whose job creation capacity are limited compared to greenfield investments.…”

Influence of external factors on foreign direct investment flows using the example of the Visegrad Group and Serbia

“…Gligorić [11] points out that theoretical and empirical findings indicate the existence of a positive effect of FDI on economic growth, employment and exports. According to Zdravković et al [47], positive effects of FDI on macroeconomic indicators (GDP and employment) can be found in research papers published by Habib and Sarwar [15] for Pakistan, in the period from 1970 to 2011. Furthermore, Pindžo and Vjetrov [32] confirmed findings of Alfaro et al [1] whose research suggests that FDI played a fundamental role in contributing to economic growth (especially in terms of development of local financial markets).…”