Foreign Direct Investment and Employment Downfall: Panel Evidence from South Asian Economies

Abstract

Significant restructuring of Foreign Capital Inflows (FKI) __ observed in particularly the South Asian Countries (SAC) and prominently the renaissance of different versions of Foreign Direct Investment (FDI) into the member countries develop a momentous of empirical research to capture the association of FDI on macroeconomic aspect of SAC. Being a fatality of stern disorders and varied state of being at the subject of employment, the fundamental concentration of this study is to envisage the direction of effect that are conveyed by FDI on employed labor force of SAC. For the panel data analyses and to have a space for an empirical argumentation, the study relied on secondary data from the period of 1980 to 2017. The results confirm long run relationship between FDI and employed labor however, negative long run coefficients are found on FDI. The study recommends well thought investment in the workable labor force of SAC to improve quality and skills within the labor for optimization of further employment supplemented with some of the essential policy reforms to melt foreign investors’ demeanor towards deciding for usage of labor.