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Vzťah medzi prílevom priamych zahraničných investícií a nezamestnanosťou v Slovenskej republike
[Relationship Between Foreign Direct Investment Inflow and Unemployment in the Slovak Republic]

Author

Listed:
  • Ľubomír Darmo
  • Marcel Novák
  • Ján Lisý

Abstract

The inflow of foreign direct investment (FDI) is linked to several positive effects, which result in growing gross domestic product (GDP) and reduced unemployment rate in the host country. The level of GDP and the unemployment rate determine the FDI inflow, but contrariwise, FDI inflow has an impact on these variables. In the paper, we investigate which of these variables is the impulse and which is consequently determined by the impulse variable. The objective of the paper is to examine the length of the FDI effect in a host economy as well as the impact of FDI inflow on the unemployment rate using vector autoregression and impulse-reaction functions. Based on results of the Granger causality, we analyse linkages between FDI inflow, unemployment rate and GDP growth in the Slovak Republic in the period 1995-2018. The results show that the impulse comes from the unemployment rate, which consequently affects the FDI inflow. However, the length of this effect is very short.

Suggested Citation

  • Ľubomír Darmo & Marcel Novák & Ján Lisý, 2020. "Vzťah medzi prílevom priamych zahraničných investícií a nezamestnanosťou v Slovenskej republike [Relationship Between Foreign Direct Investment Inflow and Unemployment in the Slovak Republic]," Politická ekonomie, Prague University of Economics and Business, vol. 2020(4), pages 443-461.
    • Handle: RePEc:prg:jnlpol:v:2020:y:2020:i:4:id:1289:p:443-461
    DOI: 10.18267/j.polek.1289
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    References listed on IDEAS

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    1. Hampl, Mojmir & Havranek, Tomas, 2018. "Foreign Investment and Domestic Productivity in the Czech Republic: A Quantitative Survey," MPRA Paper 84895, University Library of Munich, Germany.
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    6. Shu Chen Chang, 2007. "The interactions among foreign direct investment, economic growth, degree of openness and unemployment in Taiwan," Applied Economics, Taylor & Francis Journals, vol. 39(13), pages 1647-1661.
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    More about this item

    Keywords

    foreign direct investment; unemployment; gross domestic product; Granger causality; impulse-reaction function;
    All these keywords.

    JEL classification:

    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • 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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