IMPACT OF FOREIGN DIRECT INVESTMENT ON UNEMPLOYMENT IN NIGERIA
Abstract
Abstract
"This study investigates the impact of foreign direct investment (FDI) on unemployment in Nigeria, using time-series data from 1990 to 2024. It examines the direct and indirect effects of FDI on unemployment, considering factors like economic growth, sectoral job creation, and labor market dynamics, as well as moderating variables like human capital and infrastructure.
The study employs the Augmented Dickey-Fuller and Phillips-Perron unit root tests, revealing mixed orders of stationarity, which justifies the use of the Autoregressive Distributed Lag (ARDL) model to analyze short-run relationships. The ARDL Bounds cointegration test confirms a long-run relationship among the variables.
The short-run ARDL model shows a positive relationship between unemployment, inflation, and interest rates. The Engle-Granger causality test reveals unidirectional relationships between GDP growth and unemployment, inflation and FDI, FDI and inflation, and GDP growth and inflation.
Based on the findings, the study recommends that the government adopt a comprehensive and strategic approach to FDI management to maximize benefits and minimize costs.
KEYWORDS: Unemployment, Foreign Direct Investment, GDP Growth Rate, Inflation.
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