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July 26, 2026EconomiesOpen Access

The Impact of Foreign Direct Investment on Unemployment in Developing Countries: Evidence from Panel ARDL Models

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Authors

IAIbrahim Al-Chalabi

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Overview

Randomized trial examines FDI's effect on unemployment in developing countries, indicating significant positive impacts.

Key Points

  • This research investigates how Foreign Direct Investment influences unemployment levels in developing countries.
  • Panel data from 90 developing countries between 2000 and 2024 was analyzed.
  • Panel Autoregressive Distributed Lag (ARDL) models were utilized to estimate coefficients.
  • Three different models assessed long-run and short-run relationships.
  • All types of FDI showed a negative association with unemployment, indicating a strong positive effect.
  • FDI flow significantly reduces unemployment, showing high negative correlation.
  • FDI stock per capita indicated significant negative relations, with minimal crowding-out and labor-displacement.

Cite This Study

Ibrahim Al-Chalabi (2026) studied this question.

synapsesocial.com/papers/6a65a825d3aea3239cd78ab6https://doi.org/10.3390/economies14080292
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