The impact of foreign direct investment on unemployment : evidence from Arab countries

الملخص EN

Theoretically, foreign direct investment (FDI) has the ability to solve a number of economic and social problems.

Reducing unemployment is at the forefront of these problems.

Empirical studies did not agree on the inevitability of the positive macroeconomic impact of FDI on reducing unemployment.

In this paper, the macroeconomic impact of FDI on national unemployment rates in general and youth unemployment in particular is examined in 8 Arab countries.

In estimating the model, a panel unit root, panel cointegration, and Granger causality tests are used.

The positive impact of FDI on reducing national unemployment is proven in the group as a whole and individually in Jordan, Morocco, and Tunisia while it leads to increase unemployment in Egypt.

The impact of FDI on reducing youth unemployment is not proven.

The causal relationship in both directions between FDI and unemployment and the speed of adjustment towards the long-term equilibrium is not proven.