Open AccessEffect of Foreign Direct Investment on Growth-Unemployment Nexus
Author(s) -
Tomas Kadiša,
Mindaugas Butkus,
Akvilė Aleksandravičienė
Publication year - 2021
Publication title -
socialiniai tyrimai
Language(s) - English
Resource type - Journals
eISSN - 2351-6712
pISSN - 1392-3110
DOI - 10.15388/soctyr.44.2.9
Subject(s) - nexus (standard) , foreign direct investment , unemployment , economics , panel data , affect (linguistics) , labour economics , monetary economics , international economics , macroeconomics , econometrics , psychology , communication , computer science , embedded system
This paper examines the effect of foreign direct investment (FDI) on the growth-unemployment nexus. A review of previous contributions on Okun’s law uncovered which aspects of international relations are more prone to affect growth-unemployment nexus. It was found that inward FDI and outward FDI are most likely to affect this nexus. EU-28 panel data and interactive model with pooled OLS estimator were used to empirically test whether both inward and outward FDI moderates the relationship between growth and unemployment. The estimations showed that, as expected, FDI weakens the effect of growth on unemployment. Moreover, with an increase in FDI, the effect of growth on unemployment becomes less statistically significant.