Job Creation and FDI: The Role of Economic, Social and Political Climate in Developing Countries

Shar Self and Mary Connerley
Additional contact information
Shar Self: University of Northern Iowa
Mary Connerley: University of Northern Iowa

Journal of Economic Insight, 2018, vol. 44, issue 2, 59-77

Abstract: This paper examines the link between job creation and foreign direct investment (FDI) at the company/project level and whether or not this relationship is influenced by the economic, social and political climate of the country. The focus is on developing countries. Using data at the project level, results show that, for some geographic locations, FDI has a positive and significant impact on job creation. This relationship is found to hold for projects in East Asia and South Asia and to some extent for Latin America as well. However, this relationship is reversed for projects in Sub-Saharan African and the Middle Eastern and Northern African countries implying a strong regional impact. Additionally, it was found that a lack of effective governance at the country level has a negative impact on job creation. Finally, the results relating to FDI are no longer significant after controlling for endogeneity. The results relating to the harmful impact of an ill-functioning or dysfunctional governance and socio-political environment on job creation remain invariant regardless of estimation specification or method.

JEL-codes: F65 F66 J60 O10 O15 (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mve:journl:v:44:y:2018:i:2:p:59-77

Access Statistics for this article

Journal of Economic Insight is currently edited by Christopher Douglas and Joshua Lewer

More articles in Journal of Economic Insight from Missouri Valley Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Cullen Goenner ().