THE FOREIGN DIRECT INVESTMENT AND THE EMPLOYMENT IN MAGHREB COUNTRIES: AN ECONOMETRIC STUDY BY USING THE COINTEGRATION TEST AND THE PANEL MODELS

Abstract

This study aims to determinate the effect of the foreign direct investment on employment in the Arab Maghreb countries during the period 1990 and 2016, wherefore; we used methods of panel models (longitudinal time series) and the cointegration test. The results of estimate labor demand equation show that the foreign direct investment has a positive effect on employment, where the increase of 1% in the foreign direct investment will lead to an increase in labor demand of 5.49%.The results of the cointegration test proved the existence of a long-term equilibrium relationship between the foreign direct investment and the total labor force in Maghreb countries with the access rate to balance around 41.27%. The test results also showed the absence of a short-term causal relationship between them.