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The impact of Foreign Direct Investments on employment: the case of the Macedonian manufacturing sector

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  • Dimitar NIKOLOSKI

    () (University “St. Kliment Ohridski” - Bitola)

Abstract

As a less developed post-transition country, Macedonia has marked a moderate growing economic performance coupled with high and sustained unemployment during the past decade. In this context, fostering FDI has been promoted by the Macedonian government as one of the main instruments for generating employment and providing further economic development. The aim of this paper is to assess the impact of FDI on employment in Macedonian manufacturing sectors, which has been assessed by applying a single equation error correction model. The results indicate that FDI and personnel costs are statistically significant factors that positively affect employment in the manufacturing sub-sectors which, due to their interaction, might indicate higher productivity in the companies with FDI. In addition, the negative impact of the relative personnel cost per employee vis-à-vis Serbia in the short-run reaffirms the assertion that FDI in the Macedonian manufacturing sectors is mainly driven by efficiency seeking motives.

Suggested Citation

  • Dimitar NIKOLOSKI, 2017. "The impact of Foreign Direct Investments on employment: the case of the Macedonian manufacturing sector," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 8, pages 147-165, December.
  • Handle: RePEc:jes:journl:y:2017:v:8:p:147-165
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    File URL: http://ejes.uaic.ro/articles/EJES2017_0802_NIK.pdf
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    References listed on IDEAS

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    1. Aneta Krstevska & Magdalena Petrovska, 2012. "The economic impacts of the foreign direct investments: panel estimation by sectors on the case of Macedonian economy," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 1(2), pages 55-73.
    2. John H. Dunning & Sarianna M. Lundan, 2008. "Multinational Enterprises and the Global Economy, Second Edition," Books, Edward Elgar Publishing, number 3215.
    3. Kostas Axarloglou & Mike Pournarakis, 2007. "Do All Foreign Direct Investment Inflows Benefit the Local Economy?," The World Economy, Wiley Blackwell, vol. 30(3), pages 424-445, March.
    4. Aristidis Bitzenis & John Marangos & Valentina Nuskova, 2007. "Motives for Foreign Direct Investment in the Manufacturing Sector in FYR Macedonia," Post-Communist Economies, Taylor & Francis Journals, vol. 19(4), pages 505-527.
    5. Hubert Gabrisch & Doris Hanzl-Weiss & Mario Holzner & Michael Landesmann & Johannes Pöschl & Hermine Vidovic, 2016. "Improving Competitiveness in the Balkan Region – Opportunities and Limits," wiiw Research Reports 411, The Vienna Institute for International Economic Studies, wiiw.
    6. Olney, William W., 2013. "A race to the bottom? Employment protection and foreign direct investment," Journal of International Economics, Elsevier, vol. 91(2), pages 191-203.
    7. Slavica Penev & Matija Rojec, 2014. "The Future Of Fdi In South Eastern European Countries: Messages From New Eu Member States," Economic Annals, Faculty of Economics, University of Belgrade, vol. 59(202), pages 43-68, July – Se.
    8. Markus Leibrecht & Johann Scharler, 2009. "How important is employment protection legislation for Foreign Direct Investment flows in Central and Eastern European countries?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 17(2), pages 275-295, April.
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    Keywords

    FDI; employment; manufacturing;

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