Envisaging the Role of FDI for Unemployment Reduction in Pakistan

Authors

Ehtsham ullah Jarral(1) Ehtsham ullah Jarral Corresponding author Affiliation Lecturer in Economics, Department of Higher Education, Govt. of Azad Jummu and Kashmir Email addressjarral537@hotmail.com Other articles by this author , Dawood Khan Abbasi(2) Dawood Khan Abbasi Affiliation Lecturer in Economics, Department of Higher Education, Govt. of Azad Jummu and Kashmir Other articles by this author , Nabila Saddaf(3) Nabila Saddaf Affiliation PhD Economics, Federal Urdu University of Arts, Science, and Technology, Islamabad Other articles by this author

  1. Lecturer in Economics, Department of Higher Education, Govt. of Azad Jummu and Kashmir
  2. Lecturer in Economics, Department of Higher Education, Govt. of Azad Jummu and Kashmir
  3. PhD Economics, Federal Urdu University of Arts, Science, and Technology, Islamabad

https://doi.org/10.36923/jcmi.v4i2.565

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Abstract

The era of last century gave birth to the phenomenon of globalization. Access to the markets and transfer of resources enhanced the economic activities worldwide. Various studies depict that foreign direct investment (FDI) inflows induct a vital role in the economic advancement and they pose apparent impacts on the employment generation process. FDI is also a cause of technology transfers for imparting skills to the workers. This study analyses the role of FDI in reducing the unemployment in Pakistan. The study uses vector errors correction model (VECM) on the time series data over the span of 1991-2023. The results observe long-run impacts of FDI along with its shortrun influences on the employment levels in the economy. This impact is of positive nature which ultimately ensures unemployment reduction in the country by giving rise to the FDI inflows. Moreover, these results forecast the regulation of short run shocks at a higher speed of adjustment in the long run. Henceforth the authorities are recommended to commence and implement the FDI magnetizing policies for improving the employment conditions in the country.

Article information

Keywords
GlobalizationUnemployment reductionFDIVECMspeed of adjustmentmagnetizing policies
Section
Articles
Issue
Vol. 4 No. 2 (2023)
Submitted
December 5, 2023
Accepted
December 18, 2023
Published
December 18, 2023
Corresponding author
Ehtsham ullah Jarral
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