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Nexus Between Foreign Direct Investment and Employment in Manufacturing and Services Sectors in Tunisia: An ARDL Approach

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  • Mouldi Ben Amor

    (Department of Economics, college of Economics and Administrative Science, Al Imam Mohammad Ibn Saud Islamic University (IMSIU), PO Box 5701, Riyadh, 11432 Saudi Arabia)

Abstract

This study investigated both the cointegration and the causal nexus between foreign direct investment (FDI) and employment in the manufacturing and services sectors in Tunisia by employing the augmented autoregressive distributed lag (ARDL) bounds testing approach. Our findings confirm a long-run relationship among the examined variables. Causality results indicated both short-run and long-run bidirectional causality between FDI and employment in the services sectors as well as between employment in the manufacturing and the services sectors. However, there is a unidirectional causality between FDI and employment in manufacturing running from FDI to employment in Manufacturing. These results are of particular interest and offer new perspectives and insight for new policies toward promoting and diversifying foreign investment as a critical contributor to the manufacturing sector's productive capacity and by extension to its employment level.

Suggested Citation

  • Mouldi Ben Amor, 2023. "Nexus Between Foreign Direct Investment and Employment in Manufacturing and Services Sectors in Tunisia: An ARDL Approach," International Journal of Economic Sciences, European Research Center, vol. 12(2), pages 1-20, November.
    • Handle: RePEc:aop:jijoes:v:12:y:2023:i:2:p:1-20
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    References listed on IDEAS

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    More about this item

    Keywords

    FDI; employment; Manufacturing; Services; ARDL; causality;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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