The Impact of FDI on GDP Growth and Unemployment in Yemen

Ghassan Hassan Ali Al-Masbhi, Yulan Du
2020 Proceedings of the Fifth International Conference on Economic and Business Management (FEBM 2020)   unpublished
The paper aims to investigate the impact of FDI on GDP growth and Unemployment in Yemen from 1998 to 2018 by employing the Augmented Dickey-Fuller test to study the stationarity of the time series data, the Johansen Cointegration test to test the existence of the long-run relationship between the variables, the Granger causality test to find out the causal relationship between the dependent and the independent variables. Findings show that foreign direct investment and GDP growth were
more » ... at first difference while the unemployment rate was found to be stationary at the second difference. The cointegration test approved the existence of a long-run relationship between the variables. The Granger causality test suggests that causality runs from FDI to Unemployment, not GDP. Adding to these tests, diagnostic tests were performed to check the reliability of the results, which show that the findings are consistent. Moreover, the study also proposes that the government of Yemen should emphasize different factors other than mentioned in the study in order to sustain the economy and create more job opportunities in Yemen.
doi:10.2991/aebmr.k.201211.004 fatcat:azes2fiyonfzjdcfdkzaltskgu