IDEAS home Printed from https://ideas.repec.org/a/rfa/aefjnl/v3y2016i4p73-77.html
   My bibliography  Save this article

Capital Outflows and Unemployment: A Panel Analysis of OECD Countries

Author

Listed:
  • Burcak Polat

Abstract

Liberalization of trade and payment regimes after the mid-1980s expedited capital outflows, especially from developing countries toward developed ones. This inevitable trend has given rise to new discussions among scholars regarding the real effect of capital movements abroad on the domestic labor market. However, the debate is ambiguous and ongoing. Thus, the main objective of this study is to determine the relationship between capital outflows and employment levels in the home country from 2006¨C2013 in 30 Organization for Economic Co-operation and Development (OECD) countries. We have employed dynamic panel data methods to capture the causal relationship between capital outflows and employment levels. Finally, our empirical predictions show that capital outflows lead to a reduction in employment levels in the home market, whereas a larger market size leads to an increase in the employment levels.

Suggested Citation

  • Burcak Polat, 2016. "Capital Outflows and Unemployment: A Panel Analysis of OECD Countries," Applied Economics and Finance, Redfame publishing, vol. 3(4), pages 73-77, November.
    • Handle: RePEc:rfa:aefjnl:v:3:y:2016:i:4:p:73-77
    as

    Download full text from publisher

    File URL: http://redfame.com/journal/index.php/aef/article/view/1748/2056
    Download Restriction: no
    File URL: http://redfame.com/journal/index.php/aef/article/view/1748
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Blomstrom, Magnus & Fors, Gunnar & Lipsey, Robert E, 1997. "Foreign Direct Investment and Employment: Home Country Experience in the United States and Sweden," Economic Journal, Royal Economic Society, vol. 107(445), pages 1787-1797, November.
    2. Eckel, Carsten, 2003. "Labor market adjustments to globalization: unemployment versus relative wages," The North American Journal of Economics and Finance, Elsevier, vol. 14(2), pages 173-188, August.
    3. Chen, Tain-Jy & Ku, Ying-Hua, 2000. "The effect of foreign direct investment on firm growth: the case of Taiwan's manufacturers," Japan and the World Economy, Elsevier, vol. 12(2), pages 153-172, May.
    4. Stevens, Guy V. G. & Lipsey, Robert E., 1992. "Interactions between domestic and foreign investment," Journal of International Money and Finance, Elsevier, vol. 11(1), pages 40-62, February.
    5. repec:hhs:iuiwop:490 is not listed on IDEAS
    6. Brecher, Richard A. & Choudhri, Ehsan U., 1987. "International migration versus foreign investment in the presence of unemployment," Journal of International Economics, Elsevier, vol. 23(3-4), pages 329-342, November.
    7. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    8. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    9. Frank, Robert H. & Freeman, Richard T., 1978. "Distributional Consequences of Direct Foreign Investment," Elsevier Monographs, Elsevier, edition 1, number 9780122650505 edited by Shell, Karl.
    10. Bharati Basu, 1998. "Efficiency wages, unemployment and international factor movements," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 7(3), pages 317-338.
    11. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Beatriz Cuadrado-Ballesteros & Noemí Peña-Miguel, 2018. "The Socioeconomic Consequences of Privatization: An Empirical Analysis for Europe," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 139(1), pages 163-183, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. You, Kefei & Solomon, Offiong Helen, 2015. "China's outward foreign direct investment and domestic investment: An industrial level analysis," China Economic Review, Elsevier, vol. 34(C), pages 249-260.
    2. Mr. Ali J Al-Sadiq, 2013. "Outward Foreign Direct Investment and Domestic Investment: The Case of Developing Countries," IMF Working Papers 2013/052, International Monetary Fund.
    3. Emre Gökçeli & Jan Fidrmuc & Sugata Ghosh, 2022. "Effect of Foreign Direct Investment on Economic Growth and Domestic Investment: Evidence from OECD Countries," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 8(2), pages 190-216.
    4. Segundo Camino-Mogro & Natalia Bermúdez-Barrezueta & Mary Armijos, 2023. "Is FDI a potential tool for boosting firm’s performance? Firm level evidence from Ecuador," Journal of Evolutionary Economics, Springer, vol. 33(2), pages 341-391, April.
    5. Mei-Yin Lin & Jue-Shyan Wang, 2008. "Capital outflow and unemployment: evidence from panel data," Applied Economics Letters, Taylor & Francis Journals, vol. 15(14), pages 1135-1139.
    6. Robert Reed & Christina Lira & Lee Byung‐Ki & Junsoo Lee, 2016. "Free Trade Agreements and Foreign Direct Investment: The Role of Endogeneity and Dynamics," Southern Economic Journal, John Wiley & Sons, vol. 83(1), pages 176-201, July.
    7. Diego E. Vacaflores, 2011. "Was Latin America Correct In Relying In Foreign Direct Investment To Improve Employment Rates?," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 11(2).
    8. Cong Minh Huynh & Vu Hong Thai Nguyen & Hoang Bao Nguyen & Phuc Canh Nguyen, 2020. "One-way effect or multiple-way causality: foreign direct investment, institutional quality and shadow economy?," International Economics and Economic Policy, Springer, vol. 17(1), pages 219-239, February.
    9. Daniel Ştefan Armeanu & Georgeta Vintilă & Ştefan Cristian Gherghina, 2017. "Empirical Study towards the Drivers of Sustainable Economic Growth in EU-28 Countries," Sustainability, MDPI, vol. 10(1), pages 1-22, December.
    10. Youngho Kang & Byung-Yeon Kim, 2018. "Immigration and economic growth: do origin and destination matter?," Applied Economics, Taylor & Francis Journals, vol. 50(46), pages 4968-4984, October.
    11. Vieira, Flávio & MacDonald, Ronald & Damasceno, Aderbal, 2012. "The role of institutions in cross-section income and panel data growth models: A deeper investigation on the weakness and proliferation of instruments," Journal of Comparative Economics, Elsevier, vol. 40(1), pages 127-140.
    12. Kitazawa, Yoshitsugu, 2001. "Exponential regression of dynamic panel data models," Economics Letters, Elsevier, vol. 73(1), pages 7-13, October.
    13. Alessandra Canepa & Fawaz Khaled, 2018. "Housing, Housing Finance and Credit Risk," IJFS, MDPI, vol. 6(2), pages 1-23, May.
    14. Efobi, Uchenna & Asongu, Simplice & Okafor, Chinelo & Tchamyou, Vanessa & Tanankem, Belmondo, 2016. "Diaspora Remittance Inflow, Financial Development and the Industrialisation of Africa," MPRA Paper 76121, University Library of Munich, Germany.
    15. Eschenhof, Sabine, 2009. "Standard Taylor rules revisited: A cross country study for European countries," Darmstadt Discussion Papers in Economics 196, Darmstadt University of Technology, Department of Law and Economics.
    16. Huy Quang Doan, 2019. "Trade, Institutional Quality and Income: Empirical Evidence for Sub-Saharan Africa," Economies, MDPI, vol. 7(2), pages 1-23, May.
    17. Kjetil Bjorvatn & Mohammad Reza Farzanegan, 2014. "Resource Rents, Power, and Political Stability," CESifo Working Paper Series 4727, CESifo.
    18. Simplice A Asongu, 2013. "On the Obituary of Scientific Knowledge Monopoly," Economics Bulletin, AccessEcon, vol. 33(4), pages 2718-2731.
    19. Marin, Dalia & Fabbri, Francesca, 2012. "What Explains the Rise in CEO Pay in Germany? A Panel Data Analysis for 1977-2009," CEPR Discussion Papers 8879, C.E.P.R. Discussion Papers.
    20. Samuel Fosu, 2013. "Banking Competition in Africa: Sub-regional Comparative Studies," Discussion Papers in Economics 13/12, Division of Economics, School of Business, University of Leicester, revised Jun 2013.

    More about this item

    Keywords

    Unemployment rate; Capital outflows; FDI outflows; Dynamic Panel Data;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rfa:aefjnl:v:3:y:2016:i:4:p:73-77. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Redfame publishing (email available below). General contact details of provider: https://edirc.repec.org/data/cepflch.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.