Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/185675
Authors: 
Bayar, Yilmaz
Sasmaz, Mahmut Unsal
Year of Publication: 
2017
Citation: 
[Journal:] International Journal of Business and Economic Sciences Applied Research (IJBESAR) [ISSN:] 2408-0101 [Volume:] 10 [Year:] 2017 [Issue:] 3 [Pages:] 90-96
Abstract: 
Purpose: The goal of the paper is to investigate the long run effect of both foreign direct investments and domestic investments on the unemployment in 21 emerging economies over the period 1994-2014. Design/methodology/approach: The effect of domestic and foreign direct investments on unemployment was investigated via panel data analysis. First tests of cross-section dependence and homogeneity were conducted, and then the stationarity of the series was analyzed with Pesaran's (2007) CIPS unit root test. The long run relationship among the series was examined with Westerlund-Durbin-Hausman's (2008) co-integration test. Finally, we estimated the long run coefficients with the Augmented Mean Group (AMG) estimator. Findings: The empirical findings revealed a co-integrating relationship among domestic investments, foreign direct investments, and unemployment. Furthermore, foreign direct investment inflows affected the unemployment positively in the long term, but domestic investments affected the unemployment negatively. Originality/value: This study can be considered as one of the early studies researching the long run interaction between domestic investments, foreign direct investments and unemployment for the sample of emerging market economies. Furthermore, the findings are very meaningful for policymakers in the design the economic policies for decreasing unemployment.
Subjects: 
Gross capital formation
foreign direct investments
unemployment
emerging market economies
panel co-integration analysis
JEL: 
C33
E24
F21
F23
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/4.0/
Document Type: 
Article
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