| dc.description.abstract | The main purpose of this study was to comprehensively investigate the relationship between Foreign Direct Investment (FDI) flows and unemployment levels in Uganda. The study applied the ordinary least squares methodology and specifically employed the multiple linear regression of robust standard errors to estimate the effect of foreign direct investment on the unemployment level. The data utilized was obtained from the World Bank website and organized in Ms. Excel for preparation of the analysis levels. The data analysis techniques applied involved the summary of descriptive statistics, the pairwise correlations, the regression model and Granger causality test. The correlation matrix showed a slight negative association between FDI and unemployment, with a marginally negative correlation of 0.09. The study results predicted a 34% decrease in unemployment rate with every unit increase in foreign direct investment (FDI). In the test of the Granger causality results we reject the null hypothesis, suggesting that there is reverse causation between FDI and unemployment. The study suggests that there is a "reverse causation" between foreign direct investment (FDI) and unemployment, as well as between unemployment and FDI.
Policymakers should promote and facilitate FDI inflows to reduce unemployment rates by creating an attractive business environment, offering incentives, and eliminating investment barriers. Policymakers should adopt integrated economic policies that leverage FDI to stimulate job creation, addressing both FDI attraction and employment strategies to stimulate economic growth and create job opportunities. The main purpose of this study was to comprehensively investigate the relationship between Foreign Direct Investment (FDI) flows and unemployment levels in Uganda. The study applied the ordinary least squares methodology and specifically employed the multiple linear regression of robust standard errors to estimate the effect of foreign direct investment on the unemployment level. The data utilized was obtained from the World Bank website and organized in Ms. Excel for preparation of the analysis levels. The data analysis techniques applied involved the summary of descriptive statistics, the pairwise correlations, the regression model and Granger causality test. The correlation matrix showed a slight negative association between FDI and unemployment, with a marginally negative correlation of 0.09. The study results predicted a 34% decrease in unemployment rate with every unit increase in foreign direct investment (FDI). In the test of the Granger causality results we reject the null hypothesis, suggesting that there is reverse causation between FDI and unemployment. The study suggests that there is a "reverse causation" between foreign direct investment (FDI) and unemployment, as well as between unemployment and FDI. Policymakers should promote and facilitate FDI inflows to reduce unemployment rates by creating an attractive business environment, offering incentives, and eliminating investment barriers. Policymakers should adopt integrated economic policies that leverage FDI to stimulate job creation, addressing both FDI attraction and employment strategies to stimulate economic growth and create job opportunities. | en_US |
