The effects of foreign direct investment on youth unemployment in the Southern African Development Community

Bibliographic Data

ID21541009
AuthorsDadirai Mkombe (University of Malawi), Adane Tufa (0000-0001-9801-6526, International Institute of Tropical Agriculture (IITA), Lilongwe, Malawi, corresponding author), Arega D Alene (0000-0002-2491-4603, International Institute of Tropical Agriculture (IITA), Lilongwe, Malawi), Julius Manda (0000-0002-9599-5906, International Institute of Tropical Agriculture (IITA), Lilongwe, Malawi), Shiferaw Feleke (0000-0002-0759-4070, International Institute of Tropical Agriculture (IITA), Dar es Salaam, Tanzania), Tahirou Abdoulaye (0000-0002-8072-1363, International Institute of Tropical Agriculture (IITA), Ibadan, Nigeria), Victor M Manyong (0000-0003-2477-7132, International Institute of Tropical Agriculture (IITA), Dar es Salaam, Tanzania)
Year2021
Volume38
Issue6
Pages863-878
Publication date2021-11-02
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueDevelopment Southern Africa (JOURNAL)
Journal identifiersISSN: 0376-835X • E-ISSN: 1470-3637
PublisherInforma UK Limited (PUBLISHER • GB)
DOI10.1080/0376835x.2020.1796598
OpenAlexW3045750595
LanguageEN
Citations received6
References cited26

This paper examines the effect of foreign direct investment (FDI) on youth unemployment in the Southern African Development Community (SADC) region using panel data from the World Bank World Development Indicators for the period 1994–2017. Results from the Feasible Generalized Least Squares (FGLS-Parks) technique show that FDI has an insignificant effect on reducing youth unemployment in the SADC region. This could be because the type of FDI in the region is partly mergers and acquisitions, which has fewer jobs creating capacity compared to Greenfield investment. This suggests the need for governments in the region to pursue labour-absorbing FDI policies and also ensure that foreign investment inflows are channelled towards labour-intensive sectors that have high labour absorptive capacity such as horticulture and floriculture

Absorptive capacity · Business · Development economics · Economic growth · Economics · Floriculture · Foreign direct investment · Greenfield project · International economics · Labour economics · Macroeconomics · Panel data · Political science · Politics · Unemployment · Youth unemployment · International Business and FDI · Migration and Labor Dynamics · Migration, Ethnicity, and Economy

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