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The Effect of Foreign Direct Investment from Austria on Skilled and Unskilled Labor in Bosnia and Herzegovina

Author

Listed:
  • Safet Kurtovic
  • Haris Dacic
  • Sead Talovic

Abstract

Foreign direct investment (FDI) is considered a major factor in the process of a country's economic development. The presence of FDI in host countries has multiple effects on their economic development. One of these effects pertains to the change in organization and composition of labor market. With that in mind, this paper studies the effect of FDI inflow from Austria on the labor market in Bosnia and Herzegovina (B&H). It analyzes the time series data for the period 2005 - 2014. The research of the paper is divided into two parts. The first part studies the effect of certain independent variables on the increase in real average wages of skilled and unskilled labor. The second part examines the effect of certain independent variables on the increase in the number of skilled and unskilled workers. This paper applies the North-South Model and OLS Regression. The research has shown that the impact of the majority of independent variables on dependent variables is statistically significant.

Suggested Citation

  • Safet Kurtovic & Haris Dacic & Sead Talovic, 2016. "The Effect of Foreign Direct Investment from Austria on Skilled and Unskilled Labor in Bosnia and Herzegovina," Business and Economic Research, Macrothink Institute, vol. 6(1), pages 210-233, June.
    • Handle: RePEc:mth:ber888:v:6:y:2016:i:1:p:210-233
    as

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    References listed on IDEAS

    as
    1. Robert C. Feenstra & Gordon H. Hanson, 1995. "Foreign Investment, Outsourcing and Relative Wages," NBER Working Papers 5121, National Bureau of Economic Research, Inc.
    2. Ronald B Davies & Rodolphe Desbordesz, 2012. "Greenfield FDI and Skill Upgrading," Working Papers 201209, School of Economics, University College Dublin.
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    More about this item

    Keywords

    FDI; Skilled labor; Unskilled labor; Labor market; Average wage;
    All these keywords.

    JEL classification:

    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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