The impact of entry modes of Foreign Direct Investment towards unemployment: Evidence from Asian countries
Article Metrics Report
Views, downloads, citations, engagementCited by
Current citation countResearch summary
This study attempts to examine the impact of entry modes of foreign direct investment (FDI) namely Greenfield investment and Brownfield investment towards unemployment in 25 Asian countries over the period of 2006 – 2015 (10 years) where the countries were divided into three groups: total, developing and developed Asian countries. The Breuch-Pagan Lagrange Multiplier test has been used to determine whether Ordinary Least Square or Fixed Effect-Instrumental Variables is appropriate for this study. In order to avoid the endogeneity problem that usually occurs in the panel data analysis, this study includes instrumental variables in the fixed effect estimators. The results depict mixed findings where both total and developed Asian countries are negatively significant between FDI and unemployment while both of the entry modes are insignificant. However, for the case of developing Asian countries, this study found insignificant and positive relationship between FDI and unemployment, while both entry modes of FDI were negatively significant towards unemployment. Thus, this study concludes that the entry modes of FDI are significant to reduce unemployment in developing Asian countries compared to developed Asian countries.
Article History
How to Cite
Hilom-polinon, M. & Hakim, T. A.. (2019). The impact of entry modes of Foreign Direct Investment towards unemployment: Evidence from Asian countries. International Journal of Business and Economic Development, Volume 07 Issue 02.
Citation Context
APA
Hilom-polinon, M. & Hakim, T. A.. (2019). The impact of entry modes of Foreign Direct Investment towards unemployment: Evidence from Asian countries. International Journal of Business and Economic Development, Volume 07 Issue 02.
MLA
Hilom-polinon, Meldebra, and Taufik Abd Hakim. "The impact of entry modes of Foreign Direct Investment towards unemployment: Evidence from Asian countries." International Journal of Business and Economic Development, Volume 07 Issue 02, 2019.
Chicago
Meldebra Hilom-polinon and Taufik Abd Hakim. "The impact of entry modes of Foreign Direct Investment towards unemployment: Evidence from Asian countries." International Journal of Business and Economic Development Volume 07 Issue 02 (23 Oct 2019).
Harvard
Hilom-polinon, M. & Hakim, T. A. (2019) The impact of entry modes of Foreign Direct Investment towards unemployment: Evidence from Asian countries. International Journal of Business and Economic Development, Volume 07 Issue 02
References
- Aktar, I., Demirci, N., & Ozturk, L. (2009). Can Unemployment be Cured by Economic Growth and Foreign Direct Investment in Turkey? International Research Journal of Finance and Economics, 27, 203 - 211.
- Amarendra, S., & Oscar, C. (2018). The Labor Market Effects of FDI: A Panel Data Evidence from Mexico. Foreign Direct Investment in Developing Countries, 161 - 209.
- Anderson, E., & Gatignon, H. (1986). Modes of Foreign Entry: A Transaction Cost Analysis and Propositions. Journal of International Business Studies, 17(3), 1-26.
- Angrist, J., & Alan, K. (2001). Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments. Journal of Economics Perspectives, 15(4), 69–85.
- Bayar, Y. (2014). Effects of economic growth, export and foreign direct investment inflows on unemployment in Turkey. Investment Management and Financial Innovations, 11(2).
- Bayar, Y., & Sasmaz, M. (2017). Impact of Foreign Direct Investment on Unemployment in Emerging Market Economies: A Co-Integration Analaysis World Emerging Market Economies. International Journal f Business and Economic Sciences Applied Research, 10(3), 90 - 96.
- Branstetter, L. (2006). Is foreign direct investment a channel of knowledge. Journal of International Economics, 68(2), 325 – 344.
- Breusch, T., & Pagan, A. (1978). A simple test for heteroskedasticity and random coefficient variation. Econometrica, 46, 1287 - 1294.
- Chang, S.‐J., & Rosenzweig, P. M. (2001). The choice of entry mode in sequential foreign direct investment”. Strategic Management Journal, 22(8), 747 - 776.
- Chaudhuri, S., & Mukhopadhyay, U. (2014). Foreign direct investment in developing countries: A theoretical evaluation. Foreign Direct Investment in Developing Countries, 161–209.
- Gujarati, D., & Porter, D. (2009). Basic econometrics (5th ed.). Boston:McGraw-Hill.
- Hansen, L. P. (1982). Large Sample Properties of Generalized Method of Moments Estimators. Econometrica, 50, 1029-1054.
- Hisarciklilar, M., Gultekin-Karakas, D., & Asici, A. (2014). Can FDI be a Panacea for Unemployment? The Turkish Case. In T. Dereli, Y. P. Soykut-Sarica, & A. Sen-Tasbasi, Labor and Employment Relations in a Globalized World (pp. 43 - 70). Springer, Cham.
- Irpan, H. M., Saad, R. M., Nor, A. H., Noor, A. H., & Ibrahim, N. (2016). Impact of foreign direct investment on the unemployment rate in Malaysia. Journal of Physics: Conference Series 710.
- Jayaraman, T., & Singh, B. (2007). Foreign Direct Investment and Employment Creation in Pacific Island Countries: An Empirical Study of Fiji. Asia-Pacific Research and Training Network on Trade. Working Paper Series (3507).
- Lloyd, S. (1996). Universal Quantum SImulators. Science,New Series, 272(5278), 1073-1078.
- Malley, J., & Moutos, T. (2001). Capital accumulation and unemployment: A tale of two 'continents'. The Scandinavian Journal of Economics, 103(1), 79-99.
- Montgomery, D. C., Peck, E. A., & Vining, G. G. (2001). Introduction to linear regression analysis (3rd edition ed.). Wiley, New York.
- Mucuk, M., & Dermirsel, T. (2013). The effect of foreign direct investments on unemployment: Evidence from panel for seven developing countries. Journal of Business, Economics and Finance, 2(3), 54-66.
- Ndikumana, L., & Verick, S. (2008). The Lingkages between FDI and Domestic Investment: Unravelling the Developmental Impact of Foreign Investment. Development Policy Review, 26(6).
- OECD, O. f.-o. (2002). Foreign Direct Investment for Development: Masimising Benefits, Minimising Costs. OECD PUBLICATIONS,2.
- Root, F. R. (1987). Entry strategies for international markets. Lexington Book.
- Saray, M. (2011). The Relationship of Foreign Direct Investment and Employment; Turkey Case. Maliye Dergisi, 161, 381 -403.
- Sargan, J. D. (1975). Gram-Charlier Approximations Applied to t Ratios of k-Class Estimators. Econometrica, 43, 327-346.
- UNCTAD, U. N. (2017). Investment and New Industrial Policies. World Investment Report 2018.