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Foreign Direct Investments and Employment. Structural Analysis

Author

Listed:
  • Dorin JULA

    (Institute for Economic Forecasting, Romanian Academy and Ecological University of Bucharest, Financial Management Faculty.)

  • Nicolae-Marius JULA

    ("Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences.)

Abstract

We analyze the impact induced by Foreign Direct Investments on changing the sectoral structure of employment. By developing a general methodological framework, we show that, for the dynamics of the structure analysis, the appropriate model is a panel data with time specific fixed effects and with cross-section specific effects, weighted by the growth rate of total employment. To analyze the change in structures, the appropriate model is, likewise, a panel data, without time specific (fixed or random) effects, but with cross-section specific ones, weighted by total employment. We find that for Agriculture, forestry and fishery, Manufacturing and Accommodation and food services, the growth of FDI was associated with a decrease in industry share in total employment, both at global level, as well as regarding the private and public employment structures. This means that, for the industries concerned, the FDI effect on productivity improvement was superior to the effect induced on employment growth. For Mining, Electricity, Natural gas and water, Information technology and communications, Financial intermediation and insurance, Professional, scientific, technical and administrative activities and support services the effect is positive for the private sector and negative for the public one. For the remaining industries (Construction and real estate transactions, Trade, Transportation) the effects of FDI was rather positive than otherwise. Consequently, for those industries, the FDI effect on employment growth exceeds that on productivity.

Suggested Citation

  • Dorin JULA & Nicolae-Marius JULA, 2017. "Foreign Direct Investments and Employment. Structural Analysis," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 29-44, June.
    • Handle: RePEc:rjr:romjef:v::y:2017:i:2:p:29-44
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    References listed on IDEAS

    as
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    6. Maria Cipollina & Giorgia Giovannetti & Filomena Pietrovito & Alberto F. Pozzolo, 2012. "FDI and Growth: What Cross-country Industry Data Say," The World Economy, Wiley Blackwell, vol. 35(11), pages 1599-1629, November.
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    10. Metaxas, Theodore & Kechagia, Polyxeni, 2016. "Literature review of 100 empirical studies of Foreign Direct Investment: 1950-2015," MPRA Paper 71414, University Library of Munich, Germany.
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    Citations

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    Cited by:

    1. Vodă Alina Daniela & Duguleană Liliana & Dobrotă Gabriela, 2019. "Investments, Economic Growth And Employment: Var Method For Romania," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 14(2), pages 231-244, August.
    2. Moniba Sana & Um E Ammara Kousar & Aneela Akhtar Chattha, 2024. "Globalization and Labor Market: A Systematic Review of the Literature," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(1), pages 892-900.
    3. Dorin JULA & Nicoleta JULA, 2018. "Structural Breaks in Potential GDP for Romanian Economy," Computational Methods in Social Sciences (CMSS), "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences, vol. 6(1), pages 23-41, June.
    4. Mihaela-Eugenia VASILACHE, 2018. "Forecasting the Trend of Art Market," Computational Methods in Social Sciences (CMSS), "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences, vol. 6(1), pages 82-93, June.
    5. Dani Rahman Hakim & Eeng Ahman & Kusnendi Kusnendi, 2023. "The effect of FDI on the host countries' employment: A meta-regression analysis," Russian Journal of Economics, ARPHA Platform, vol. 9(2), pages 158-182, July.
    6. repec:eub:ecoecr:v:3:y:2017:i:1:p:3-20 is not listed on IDEAS
    7. Dorin Jula & Nicoleta Jula, 2017. "The Phillips Curve for the Romanian Economy, 1992-2017," Computational Methods in Social Sciences (CMSS), "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences, vol. 5(1), pages 36-48, June.
    8. Dorin JULA & Nicolae Marius JULA, 2017. "Mixed Sampling Panel Data Model for Regional Job Vacancies Forecasting," Eco-Economics Review, Ecological University of Bucharest, Economics Faculty and Ecology and Environmental Protection Faculty, vol. 3(1), pages 3-20, June.

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    More about this item

    Keywords

    Foreign Direct Investment; industry structure of employment; panel data models;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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