Relationship between FDI Inflow and Unemployment in the Case of the Former Yugoslav Republics
Dijana Capeska Bogatinoska - University of Information Science and Technology “St. Paul the Apostle” Ohrid, Partizanska bb Ohrid, North Macedonia
Jovanka Damoska Sekuloska - University of Information Science and Technology “St. Paul the Apostle” Ohrid, Partizanska bb Ohrid, North Macedonia
Angela Oncheva - University of Information Science and Technology “St. Paul the Apostle” Ohrid, Partizanska bb Ohrid, North Macedonia
DOI: https://doi.org/10.31410/Balkans.JETSS.2024.7.1.11-20
Dijana Capeska Bogatinoska - University of Information Science and Technology “St. Paul the Apostle” Ohrid, Partizanska bb Ohrid, North Macedonia
Jovanka Damoska Sekuloska - University of Information Science and Technology “St. Paul the Apostle” Ohrid, Partizanska bb Ohrid, North Macedonia
Angela Oncheva - University of Information Science and Technology “St. Paul the Apostle” Ohrid, Partizanska bb Ohrid, North Macedonia
DOI: https://doi.org/10.31410/Balkans.JETSS.2024.7.1.11-20
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Balkans Journal of Emerging Trends in Social Sciences, (2024) , Vol 7, No 1
ISSN: 2620-164X |
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Abstract: Foreign Direct Investments - FDIs are recognized in the economics literature as one of the vital determinants of economic growth. A particular interest of any host economy is to reach the employment effect of the FDIs. The purpose of the paper is to analyze the relationship between the inflow of the FDIs and the unemployment rate in the case of the former Yugoslav republics and to identify whether and how the new economies have benefited from the FDI inflow. The paper develops a model identifying the FDI as a determinant of the unemployment rate. A regression analysis is used to examine the correlation between the FDI inflow and the unemployment rate over the period of 30 years. The results show differences in FDIs inflow and huge individual variations in the unemployment rate in each country.
Keywords: FDI, Unemployment, Analysis.
JEL Classification E24 · E22 · F21
Keywords: FDI, Unemployment, Analysis.
JEL Classification E24 · E22 · F21
REFERENCES
Alalawneh, M. M., & Nessa, A. (2020). The Impact of Foreign Direct Investment on Unemployment: Panel Data Approach. Emerging Science Journal, 4, p. 228-242. https://doi.org/10.28991/esj-2020-01226
Avsenik, K. (2021). The Characteristics and Effects of Foreign Direct Investment in Slovenia (Master’s thesis), School of Economics and Business, University of Ljubljana
Bayar, Y., Remeikienė, R., Žufan, J., & Novotný, M. (2020). Unemployment Effects of Greenfield and Brownfield Investments in Post-transition European Union Members. E&M Economics and Management, 23(2), 4–16. https://doi.org/10.15240/tul/001/2020-2-001
Bogliaccini, J. A., & Egan, P. J. W. (2017). Foreign direct investment and inequality in developing countries: Does sector matter? Economics and Politics, 29(3), 209-236
Brincikova, Z., & Darmo, L. (2014). The impact of FDI inflow on employment in V4 countries, European Scientific Journal, 10(7), 245-252.
Dicken, P. (2015). Global Shift: Mapping the Changing Contours of the World Economy, 7th edn. London: The Guilford Press.
Dinga, M., & Munich, D. (2010). The Impact of territorially concentrated FDI on local labor markets: Evidence from the Czech Republic, Labor Economics, 17(2), 354-367. https://doi.org/10.1016/j.labeco.2009.06.003
Estrin, S. (2017). Foreign direct investment and employment in transition economies, IZA World of Labor. https://doi.org/10.15185/izawol.330
Gittens, D., & Pilgrim, S. (2013). Foreign direct investment and human capital: a dynamic paradox for developing countries, Journal of Finance, Accounting and Management, 4 (2), 26-49
Gökçeli, E. (2023). Effect of Aggregate FDI and Sectoral FDI on the Unemployment Rate: Evidence from Türkiye. Maliye Araştırmaları Dergisi, 9(1), 27-42.
Hunya, G., & Geishecker, I. (2005). Employment Effects of Foreign Direct Investment in Central and Eastern Europe, WIIW Research Reports 321, The Vienna Institute for International Economic Studies.
Jude, C., & Pop Silaghi, M. I. (2016). Employment effects of foreign direct investment: New evidence from Central and Eastern European countries, International Economics, 145, 32-49. https://doi.org/10.1016/j.inteco.2015.02.003
Kwan, A. D., & Tang, T. (2020). We bring you capital and job — Foreign investment and employment in Malaysia. Capital Markets Review, 28 (1), 49–63.
Narula, R., & Guimon, J. (2010). The investment development path in a globalized world: implication for Eastern Europe. Eastern Journal of European Studies, 1(2), 11.
OECD. (2002). Foreign Direct Investment for Development: Maximizing Benefits, minimizing costs, OECD publication service, Retrieved from https://www.oecd.org/investment/investmentfordevelopment/1959815.pdf
Stepanok, I. (2022). FDI and unemployment, a growth perspective, Review of International Economics, Vol. 31, Issue 2, pp.761-783 https://doi.org/10.1111/roie.12643
Tegep, J., Suratman, E., & Indra, S. (2019). The Failure of Foreign Direct Investment to Explain Unemployment Rate and the Mediating Role of Economic Growth and Minimum Wage. International Journal of Economics and Financial Issues, 9(2), 154–161.
UNCTAD. (2021). World Investment Report: Investing in sustainable recovery, United Nations Publications
Wang, M., & Choi, B. (2021). Does FDI Affect Domestic Employment in OECD Countries? The Journal of Asian Finance, Economics and Business, 8(12), 283–293. https://doi.org/10.13106/JAFEB.2021.VOL8.NO12.0283
Zdravkovic, A., Dukic, M., & Bradic-Martinovic, A. (2017). Impact of FDI on Unemployment in Transition Countries: Panel Cointegration Approach, Industrija, 45(1), 161-174. https://doi.org/10.5937/industrija45-13548
REFERENCES
Alalawneh, M. M., & Nessa, A. (2020). The Impact of Foreign Direct Investment on Unemployment: Panel Data Approach. Emerging Science Journal, 4, p. 228-242. https://doi.org/10.28991/esj-2020-01226
Avsenik, K. (2021). The Characteristics and Effects of Foreign Direct Investment in Slovenia (Master’s thesis), School of Economics and Business, University of Ljubljana
Bayar, Y., Remeikienė, R., Žufan, J., & Novotný, M. (2020). Unemployment Effects of Greenfield and Brownfield Investments in Post-transition European Union Members. E&M Economics and Management, 23(2), 4–16. https://doi.org/10.15240/tul/001/2020-2-001
Bogliaccini, J. A., & Egan, P. J. W. (2017). Foreign direct investment and inequality in developing countries: Does sector matter? Economics and Politics, 29(3), 209-236
Brincikova, Z., & Darmo, L. (2014). The impact of FDI inflow on employment in V4 countries, European Scientific Journal, 10(7), 245-252.
Dicken, P. (2015). Global Shift: Mapping the Changing Contours of the World Economy, 7th edn. London: The Guilford Press.
Dinga, M., & Munich, D. (2010). The Impact of territorially concentrated FDI on local labor markets: Evidence from the Czech Republic, Labor Economics, 17(2), 354-367. https://doi.org/10.1016/j.labeco.2009.06.003
Estrin, S. (2017). Foreign direct investment and employment in transition economies, IZA World of Labor. https://doi.org/10.15185/izawol.330
Gittens, D., & Pilgrim, S. (2013). Foreign direct investment and human capital: a dynamic paradox for developing countries, Journal of Finance, Accounting and Management, 4 (2), 26-49
Gökçeli, E. (2023). Effect of Aggregate FDI and Sectoral FDI on the Unemployment Rate: Evidence from Türkiye. Maliye Araştırmaları Dergisi, 9(1), 27-42.
Hunya, G., & Geishecker, I. (2005). Employment Effects of Foreign Direct Investment in Central and Eastern Europe, WIIW Research Reports 321, The Vienna Institute for International Economic Studies.
Jude, C., & Pop Silaghi, M. I. (2016). Employment effects of foreign direct investment: New evidence from Central and Eastern European countries, International Economics, 145, 32-49. https://doi.org/10.1016/j.inteco.2015.02.003
Kwan, A. D., & Tang, T. (2020). We bring you capital and job — Foreign investment and employment in Malaysia. Capital Markets Review, 28 (1), 49–63.
Narula, R., & Guimon, J. (2010). The investment development path in a globalized world: implication for Eastern Europe. Eastern Journal of European Studies, 1(2), 11.
OECD. (2002). Foreign Direct Investment for Development: Maximizing Benefits, minimizing costs, OECD publication service, Retrieved from https://www.oecd.org/investment/investmentfordevelopment/1959815.pdf
Stepanok, I. (2022). FDI and unemployment, a growth perspective, Review of International Economics, Vol. 31, Issue 2, pp.761-783 https://doi.org/10.1111/roie.12643
Tegep, J., Suratman, E., & Indra, S. (2019). The Failure of Foreign Direct Investment to Explain Unemployment Rate and the Mediating Role of Economic Growth and Minimum Wage. International Journal of Economics and Financial Issues, 9(2), 154–161.
UNCTAD. (2021). World Investment Report: Investing in sustainable recovery, United Nations Publications
Wang, M., & Choi, B. (2021). Does FDI Affect Domestic Employment in OECD Countries? The Journal of Asian Finance, Economics and Business, 8(12), 283–293. https://doi.org/10.13106/JAFEB.2021.VOL8.NO12.0283
Zdravkovic, A., Dukic, M., & Bradic-Martinovic, A. (2017). Impact of FDI on Unemployment in Transition Countries: Panel Cointegration Approach, Industrija, 45(1), 161-174. https://doi.org/10.5937/industrija45-13548
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