The Effect of Foreign Direct Investment on Employment in Selected Oil-Exporting Countries of the Persian Gulf

Document Type : Original Article

Authors

1 university of kurdistan

2 University of Kurdistan

3 Master of Economic Sciences, Faculty of Humanities and Social Sciences, University of Kurdistan,

Abstract

Employment, as one of the factors of development, has a significant impact on economic growth, poverty reduction, and social welfare. Foreign direct investment flows in the world in the last two decades have had a noticeable impact on the labor market in developed and developing economies. The impact of foreign direct investment on employment levels can vary depending on the economic conditions and status of each country, as well as the type and amount of inbound investments. This current article evaluates the impact of foreign direct investment on employment levels during the period 2019-2000 in 6 selected countries in the Persian Gulf region, including Iran, Saudi Arabia, Qatar, Kuwait, Bahrain, and Iraq, using panel data methodology. The results show that foreign direct investment has a positive and significant impact on employment. Additionally, gross domestic product has a positive and significant impact on employment. Oil revenues, human capital, and institutional quality have a negative and significant impact on employment. Based on the results of the article, attracting FDI can be proposed as a strategy to increase employment levels in these countries. In other words, foreign direct investment and gross domestic product can significantly contribute to increasing employment and improving the economic and social conditions of countries in the Persian Gulf region.

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References

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Public Sector Economics Studies
Volume 3, Issue 1
April 2024
Pages 117-138

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History

  • Receive Date: 31 December 2023
  • Revise Date: 16 March 2024
  • Accept Date: 28 March 2024

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