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The effect of FDI on the host countries' employment: A meta-regression analysis

Author

Listed:
  • Dani Rahman Hakim

    (Universitas Pamulang, South Tangerang, Indonesia)

  • Eeng Ahman

    (Universitas Pendidikan Indonesia, Bandung, Indonesia)

  • Kusnendi Kusnendi

    (Universitas Pendidikan Indonesia, Bandung, Indonesia)

Abstract

This study performed a meta-regression analysis (MRA) to reexamine the effect of foreign direct investment (FDI) on the host countries' employment. We detected a publication bias and heterogeneity between studies by employing 61 publications with 477 estimates as the dataset. Studies that do not control for endogeneity suffer an upward publication bias. In contrast, we found a downward publication bias in the studies that control endogeneity. After correcting that bias, we found a small positive effect of FDI on the host countries' employment as the genuine effect. By using the Bayesian Model Averaging (BMA) analysis, we found six moderator variables that could explain heterogeneity. These moderator variables are related to the FDI and employment measurement type, data characteristics, FDIreceiving countries, and estimation methods.

Suggested Citation

  • Dani Rahman Hakim & Eeng Ahman & Kusnendi Kusnendi, 2023. "The effect of FDI on the host countries' employment: A meta-regression analysis," Russian Journal of Economics, ARPHA Platform, vol. 9(2), pages 158-182, July.
    • Handle: RePEc:arh:jrujec:v:9:y:2023:i:2:p:158-182
    DOI: 10.32609/j.ruje.9.98252
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    References listed on IDEAS

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    1. Winford H. Masanjala & Chris Papageorgiou, 2008. "Rough and lonely road to prosperity: a reexamination of the sources of growth in Africa using Bayesian model averaging," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 23(5), pages 671-682.
    2. Diego E. Vacaflores, 2011. "Was Latin America Correct In Relying In Foreign Direct Investment To Improve Employment Rates?," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 11(2).
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    More about this item

    Keywords

    employment employment creation FDI labor force meta-regression;

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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