FOREIGN DIRECT INVESTMENT-UNEMPLOYMENT NEXUS: Empirical Evidence
- Tubo Pearce Okumoko
- Ebierinyo A. Akarara
- ( paper pages. 1 - 18 )
Abstract
There is a great debate on the impact of foreign directinvestment (FDI) on unemployment. Some scholars are of theview that FDI increases unemployment in the host economy,while others argue that FDI is key to reducing theunemployment rate. This paper therefore empiricallyinvestigated the FDI-unemployment nexus in Nigeria for theperiod 1981 to 2016. Data was sourced from the CentralBank of Nigeria Statistical Bulletin (2016) and the WorldBank database. The study employed the Johansencointegration test and the Error Correction Model toestablish that FDI has an inverse relationship with theunemployment rate in Nigeria, making FDI a necessary toolfor tackling the unemployment challenge of the country.Findings also revealed that there is a long-run relationshipbetween the variables in the model, and the model has aspeed of adjustment of about 46%. Therefore, it isrecommended, amongst other things, that FDI should bedirected to sectors such as Agriculture and Manufacturing,that are able to employ a major percentage of theunemployed in the economy.
Citation
Tubo Pearce Okumoko, Ebierinyo A. Akarara.
2019.
"FOREIGN DIRECT INVESTMENT-UNEMPLOYMENT NEXUS: Empirical Evidence"
The Nigerian Journal of Economic and Social Studies,
61 (2): 1 - 18.
JEL Classification
F21, F43, C23, O47
