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An Empirical Analysis of the Relationship between Foreign Direct Investment and Unemployment Rate: Evidence from Turkey

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  • Mehman Karimov
  • Anett Paradi-Dolgos
  • Rita Koroseczne Pavlin

Abstract

Purpose: This paper is aimed to analyze the impact of Foreign Direct Investment inflows in Turkey on macroeconomic variables among them the unemployment rate. Design/methodology/approach: The time series datasets (FDI, UEMP), were obtained from the World Bank database, which covers the time period 1980-2017 were utilized in employed statistical models as the ADF Unit Root, Philips–Perron Unit Root, Johansen co-integration, and the Granger causality tests, to accomplish the empirical part of the paper. Findings: Based on the results, it was confirmed that there was at most one presence of the co-integration among the analyzed series. Additionally, the results of Granger causality test had showed that there is unidirectional causality from FDI to UEMP. Originality: Thus, this paper can be a proof that Foreign Direct Investment inflows have a crucial impact on decreasing the unemployment rate in Turkey.

Suggested Citation

  • Mehman Karimov & Anett Paradi-Dolgos & Rita Koroseczne Pavlin, 2020. "An Empirical Analysis of the Relationship between Foreign Direct Investment and Unemployment Rate: Evidence from Turkey," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 453-464.
    • Handle: RePEc:ers:journl:v:xxiii:y:2020:i:1:p:453-464
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    References listed on IDEAS

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    1. Mihaela Simionescu & Mirel Daniel Simionescu, 2017. "The Connection between Foreign Direct Investment and Unemployment Rate in the United States," Working papers Globalization - Economic, Social and Moral Implications, April 2017 18, Research Association for Interdisciplinary Studies.
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    3. Nelson Johnny & Ekokeme Tamaroukro Timipere & Okoyan Krokeme & Dumani Markjackson, 2018. "Impact of Foreign Direct Investment on Unemployment rate in Nigeria (1980-2015)," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 8(3), pages 57-69, March.
    4. Konstantinos Liapis & Antonios Rovolis & Christos Galanos, 2013. "Toward a Common Tax Regime for the European Union Countries," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 93-116.
    5. Konstantinos Liapis & Antonios Rovolis & Christos Galanos, 2014. "The Tax Regimes of the EU Countries: Trends, Similarities and Differences," Contributions to Economics, in: Anastasios Karasavvoglou & Persefoni Polychronidou (ed.), Economic Crisis in Europe and the Balkans, edition 127, pages 119-145, Springer.
    6. Konstantinos J. Liapis & Christos L. Galanos & Evangelos D. Politis & Dimitrios D. Kantianis, 2014. "A Quantitative Approach to Measure Tax Competitiveness Between EU Countries," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 7(3), pages 7-23, December.
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    Cited by:

    1. Karol Kujawa, 2021. "Security Challenges in Relations between Turkey and the European Union," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 4), pages 98-111.

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    More about this item

    Keywords

    FDI; unemployment; unit root test; Johansen co-integration test; Granger Causality test.;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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