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Does Foreign Direct Investment Affect Industrial Workers? Evidence from Kingdom of Saudi Arabia

Author

Listed:
  • Aliaa Nabil Khodeir

    (Department of Economics, Faculty of Business Administration, King Saud University, Saudi Arabia)

  • Aliaa Nabil Khodeir

    (Department of Economics and Foreign Trade, Faculty of Commerce and Business Administration, Helwan University, Egypt,)

  • Sarah Nasser AL Nuwaiser

    (Department of Economics, Faculty of Business Administration, King Saud University, Saudi Arabia.)

Abstract

This paper aims at determining the essential variables that affect the employment of industrial workers in the Kingdom of Saudi Arabia (KSA) by focusing on the role of foreign direct investment as an indicator of financial openness. By using the methodology of the autoregressive distributed lag (ADRL) to identify the impacts on both the short and long run during the period (1990-2014), it turns out that foreign direct investment does not have a positive impact on the employment of industrial workers which is contrary to the hypothesis of the study. The empirical results have shown that there is a positive and significant impact of both exports and inflation on industrial employment on the long run only. Thus, the current paper is important in the decision making concerning investment and labor market in KSA.

Suggested Citation

  • Aliaa Nabil Khodeir & Aliaa Nabil Khodeir & Sarah Nasser AL Nuwaiser, 2016. "Does Foreign Direct Investment Affect Industrial Workers? Evidence from Kingdom of Saudi Arabia," International Journal of Economics and Financial Issues, International Journal of Economics and Financial Issues, vol. 6(4), pages 1858-1864.
    • Handle: RePEc:eco:journ1:2016-04-76
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    References listed on IDEAS

    as
    1. T.K. Jayaraman & Baljeet Singh, 2007. "Foreign Direct Investment and Employment Creation in Pacific Island Countries: An Empirical Study of Fiji," Working Papers 3507, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    2. Driffield, Nigel & Taylor, Karl, 2000. "FDI and the Labour Market: A Review of the Evidence and Policy Implications," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 16(3), pages 90-103, Autumn.
    3. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
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    Keywords

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    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor

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