The Flow of Foreign Direct Investment in Algeria and its impact on Unemployment for the Period 2006-2015: An Analytical and Econometric Study
Keywords:
Direct Foreign Investment, Unemployment, Algerian economy, Co- integration test (Johancen & Julsuis), Granger causalityAbstract
The study aims at analyzing the impact of the flow of foreign direct investment (FDI) in Algeria on Unemployment rate , to understand and determine the nature of the relation between these variables in the Algerian economy in the period (2006-2015). For this purpose, the research uses the econometrics of time series, and specifically Co-Integration test (Johancen & Julsuis), along with the Granger causality test.
The study concludes that there is an inverse correlation, with a weak correlation coefficient, between FDI and unemployment rate, which indicates ineffectiveness of the FDI in generating job opportunities and enhancing employment rate in comparison with local investments. Regarding the Co-Integration and The causality tests, they indicate a balanced relation on the long run and a joint direction between foreign direct investment FDI and unemployment rate. Granger causality revealed the existence of a unique causal relation from the flow of foreign direct investment towards the Unemployment rates
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