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Growth effect of foreign direct investment: The role of labor market flexibility

Author

Listed:
  • Nurnaddia Nordin
  • Nurhaiza Nordin
  • Murni Yunus Mawar
  • Norzalina Zainudin

Abstract

This paper deals with the role of the labor market in moderating the growth-effect of foreign direct investment (FDI) in developing countries. FDI has developed rapidly and become the main source of economic growth in developing countries. The purpose of this paper is to examine the role of labor market flexibility in mediating the impact of FDI on economic growth in developing countries. Panel threshold regression analysis proposed by Hansen (1999) is employed to assess the hypothesis of the study. Findings/Originality: The results provide the empirical finding of the role labor market in moderating the growth effect of FDI in developed and developing countries and fill this gap by assessing the role of labor market flexibility as an absorptive capacity in FDI-growth link in developing countries.

Suggested Citation

  • Nurnaddia Nordin & Nurhaiza Nordin & Murni Yunus Mawar & Norzalina Zainudin, 2019. "Growth effect of foreign direct investment: The role of labor market flexibility," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 11(1), pages 19-31.
    • Handle: RePEc:uii:journl:v:11:y:2019:i:1:p:19-31:id:11406
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    File URL: https://journal.uii.ac.id/JEP/article/view/11406/9049
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    Cited by:

    1. Amara Zongo, 2022. "The effects of restrictive measures on cross‐border investment: Evidence from OECD and emerging countries," The World Economy, Wiley Blackwell, vol. 45(8), pages 2428-2477, August.

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