The Relationship Between Labor Productivity, Exports, and Foreign Direct Investment for Transition Economies

Mehmet Akyol and Emrullah Mete ()
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Mehmet Akyol: Gumushane Universitesi, Iktisadi ve Idari Bilimler Fakultesi Iktisat Bolumu, Gumushane-Turkiye
Emrullah Mete: Giresun Universitesi, Gorele Uygulamali Bilimler Yuksekokulu Lojistik Yonetimi Bolumu, Giresun-Turkiye

Journal of Economic Policy Researches, 2021, vol. 8, issue 2, 155-171

Abstract: Due to the scarcity of global resources and the fact that technological developments do not occur in every country, productivity has become an important instrument of economic development for many countries. It is generally accepted that an increase in labor productivity stimulates a country’s macroeconomic performance in terms of its exports, foreign direct investment (FDI), and economic growth. In this study, we examine the relationship between labor productivity, exports, and FDI for transition economies over the period from 2005 to 2019, using a Dumitrescu–Hurlin panel causality analysis. The study’s findings indicate that while a causal relationship between labor productivity and exports cannot be determined, there is one-way causality from labor productivity to FDI. The results of the analysis suggest that labor productivity is the cause of increased FDI in these countries.

Keywords: Labor productivity; Foreign direct investments; Export; Economic growth; Panel causality analysis JEL Classification : E24; J24; O11 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:ist:iujepr:v:8:y:2021:i:2:p:155-171

DOI: 10.26650/JEPR.897968

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