The impact of Foreign Direct Investments on employment: the case of the Macedonian manufacturing sector
The impact of Foreign Direct Investments on employment: the case of the Macedonian manufacturing sector

Summary/Abstract: As a less developed post-transition country, Macedonia has marked a moderate growing economic performance coupled with high and sustained unemployment during the past decade. In this context, fostering FDI has been promoted by the Macedonian government as one of the main instruments for generating employment and providing further economic development. The aim of this paper is to assess the impact of FDI on employment in Macedonian manufacturing sectors, which has been assessed by applying a single equation error correction model. The results indicate that FDI and personnel costs are statistically significant factors that positively affect employment in the manufacturing sub-sectors which, due to their interaction, might indicate higher productivity in the companies with FDI. In addition, the negative impact of the relative personnel cost per employee vis-à-vis Serbia in the short-run reaffirms the assertion that FDI in the Macedonian manufacturing sectors is mainly driven by efficiency seeking motives.

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