Export, Foreign Direct Investment and Unemployment: The Case of Turkey

Ismet Gocer, Mehmet Mercan and Osman Peker
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Mehmet Mercan: Hakkari University
Osman Peker: Adnan Menderes University

Business and Economics Research Journal, 2013, vol. 4, issue 1, 103

Abstract: Unemployment rates, also swiftly rising by the effect of 2008 crisis, are one of the most important macro-economic problems in most of the countries. This problem brings about domestic demand constriction and slowdown in economic growth. Unless a solution is found, long-lasting high unemployment rates may result in some significant social and economic costs. In order to solve this problem, states try to develop and apply different policies. Exports and foreign direct investments may be important solution instruments to decline unemployment. In this study, the effect of export and foreign direct investments on unemployment was analysed by boundary test approach with three different models by using the data of the period 2000:Q1-2011:Q1. As a result of the analysis, it was seen that series are in co-integrated relationship. According to the empirical evidences, in long term, export and foreign direct investments have a declining effect on unemployment and the influence of export is higher. In short term analysis, error correction terms of the models was found statistically significant and negative, that is, the deviation in short term among the series disappears in long term.

Keywords: Employment; Exportation; Foreign Direct Investment; Turkey. (search for similar items in EconPapers)
JEL-codes: E24 F16 F21 F23 (search for similar items in EconPapers)
Date: 2013
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