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Export, Foreign Direct Investment and Unemployment: The Case of Turkey

Author

Listed:
  • Gocer , Ismet

    (Adnan Menderes University)

  • Mercan, Mehmet

    (Hakkari University)

  • Peker, Osman

    (Adnan Menderes University)

Abstract

Unemployment rates, also swiftly rising by the effect of 2008 crisis, are one of the most important macro-economic problems in most of the countries. This problem brings about domestic demand constriction and slowdown in economic growth. Unless a solution is found, long-lasting high unemployment rates may result in some significant social and economic costs. In order to solve this problem, states try to develop and apply different policies. Exports and foreign direct investments may be important solution instruments to decline unemployment. In this study, the effect of export and foreign direct investments on unemployment was analysed by boundary test approach with three different models by using the data of the period 2000:Q1-2011:Q1. As a result of the analysis, it was seen that series are in co-integrated relationship. According to the empirical evidences, in long term, export and foreign direct investments have a declining effect on unemployment and the influence of export is higher. In short term analysis, error correction terms of the models was found statistically significant and negative, that is, the deviation in short term among the series disappears in long term.

Suggested Citation

  • Gocer , Ismet & Mercan, Mehmet & Peker, Osman, 2013. "Export, Foreign Direct Investment and Unemployment: The Case of Turkey," Business and Economics Research Journal, Uludag University, Faculty of Economics and Administrative Sciences, vol. 4(1), pages 103-103, January.
    • Handle: RePEc:ris:buecrj:0112
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    More about this item

    Keywords

    Employment; Exportation; Foreign Direct Investment; Turkey.;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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