Foreign direct investment, exports, Gross Domestic Product and the labor market in Puerto Rico
Main Article Content
Keywords
Foreign Direct Investment, Exports, Gross Domestic Product, Unemployment Rate, Labor Force Participation Rate
Abstract
In this paper, a vector autorregresive model (VAR) is applied to examine the interrelationship among foreign direct investment, exports, Gross Domestic Product (GDP), unemployment rate and labor force participation rate in Puerto Rico, taking into account a time period that includes the fiscal years from 1980 to 2010. Four cointegrating vectors were found in the system which indicates that there is a long run relationship between the variables. The findings suggest that consecutive increases in foreign direct investment inflows could significantly reduce the unemployment rate and increase interest in joining the labor force in Puerto Rico. The same result also applies to increases in export levels. The variations in Gross Domestic Product are mainly explained in the long run by the unemployment rate.
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References
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OMAN, C. (2000). Policy Competition for Foreign Direct Investment. A Study of Competition Among Governments to Attract IED. Francia: OECD Publication Service.
ONARAN, O. (2007). Jobless growth in the Central and Eastern European Countries: A Country Specific Panel Data Analysis for the Manufacturing Industry. Viena, Austria: University of Economics - B.A., 1-34.
PFAFF, B. (2008). Analysis of Integrated and Cointegrated Time Series with R. Washington, DC: Springer.
PINDYCK, R. S. & RUBINFELD, D. I. (1991). Econometric Models & Economic Forecast. New York, NY: Mc Graw-Hill.
RIVERA APONTE, A. (2006). Cambio en la estructura industrial y ocupacional del empleo en el proceso de desarrollo económico de Puerto Rico (Tesis de doctoral inédita).
RODRÍGUEZ, C. A. (2002). Análisis dinámico de la economía de Puerto Rico con un modelo de vectores autorregresivos y cointegración. Series de Ensayos y Monografías, (110), 1-16.
RODRÍGUEZ, C. A. (2004a). Conceptos básicos y aspectos matemáticos sobre el análisis de raíces unitarias y cointegración. Ceteris Paribus, 4(9), 1-30.
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RUIZ, A. L. (2006a). Cambio tecnológico e inversión en capital humano: Dos factores claves en los nuevos modelos de crecimiento económico. Boletín de la Asociación de Economistas de Puerto Rico, 1(1), 7-8.
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SALEHIZADEH, M. (2005). Foreign Direct Investment Inflows and the US Economy: An Empirical Analysis. Economic Issues, 10(2), 29-50.
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ZHANG, Q. & FELMINGHAM, B. (2002). The Role of FDI, Exports and Spillover Effects in the Regional Development of China. The Journal of Development Studies, 38(4), 157-178.
AKAIKE, H. (1974). A New Look at the Statistical Model Identification. IEEE Transactions on Automatic Control, 19 (6), 716-723.
AKAIKE, H (1981). Likelihood of a Model and Information Criteria. Journal of Econometrics, 16, 3-14.
AKTAR, I., OZTURK, L. & DEMIRCI, N. (2007). The Impact of IED, Export, Economic Growth, Total Fixed Investment on Unemployment in Turkey. Turquía: Kirikkale University.
AKTAR, I. & OZTURK, L. (2009). Can Unemployment be Cured by Economic Growth and Foreign Direct Investment in Turkey? International Research Journal of Finance & Economics, (27), 203-211.
ARTIGE, L. & NICOLIN, R. (2009). Market Potential, Productivity and Foreign Direct Investment: Some Evidence from Three Case Studies. European Planning Studies, 18(2), 147-168.
AXARLOGLOU, K. & POURNARAKIS, M. (2007). Do all Foreign Direct Investment Inflows Benefit the Local Economy? The World Economy, 30(3), 424-445.
APONTE, E. (1999). Hacia una política y desarrollo de una infraestructura de información y conocimiento para la implantación de la estrategia económica de Puerto Rico. En F. E. Martínez (Ed.), Futuro económico de Puerto Rico: Antología de ensayos del Proyecto universitario sobre el futuro económico de Puerto Rico. San Juan, PR: Editorial de la Universidad de Puerto Rico.
BAILEY, D. & DRIFFIELD, N. (2007). Industrial Policy, FDI and Employment: Still 'Missing a Strategy'. J Ind Compet Trade, (7), 189-211.
BARRY, F. & BERGIN, A. (2010). Ireland’s Inward IED over the Recession and Beyond. Dublín, Irlanda: Trinity College Dublin & ESRI - NUI-Maynooth.
BOSWORTH, B. P. & COLLINS, S. M. (2006). Restoring Growth: The Policy Options. En S. M. Collins, B. P. Bosworth & M. A. Soto-Class (Eds.), The Economy of Puerto Rico: Restoring Growth. Washington, DC.: Brookings Institution Press.
BREUER, A., LESCONI-FRUMUSANO, N. M. & BILIANACIUREA, J. (2010). Investments and Economic Recovery. Annuals of the University of Petroşani, Economics, 10(1), 29-36.
CASTRO, O. & ABREU, J. L. (2008). Cómo afecta el contexto cultural en la administración de los negocios internacionales. International Journal of Good Conscience, 3(1), 679-700.
CHANG, S. C. (2006). The Dynamic Interactions Among Foreign Direct Investment, Economic Growth, Exports and Unemployment: Evidence from Taiwán. Economic Change & Restructuring, 38(3), 235-256.
CHANG, S. C. (2007). The Interactions among Foreign Direct Investment, Economic Growth, Degree of Openness and Unemployment in Taiwán. Applied Economics, 39(13), 1647-1661.
COLLADO, A. (2009). Soberanías exitosas: Seis modelos para el desarrollo económico de Puerto Rico (2a. ed.), Puerto Rico, PR: La Voz del Centro.
DIETZ, J. L. (1989). Historia económica de Puerto Rico. Estados Unidos: El Huracán.
DIETZ, J. L. (2003). Puerto Rico: Negotiating Development and Change. United States of America: Lynne Rienner Publishers.
EIGNER, F. (2009). Forecasting and VAR Models. UK Econometric Forecasting, 1-12.
ENDERS, W. (1995). Applied Econometric Time Series. New York, NY: John Wiley & Sons.
ERNST, C. (2005). The FDI– Employment Link in a Globalizing World: The Case of Argentina, Brazil and Mexico. Recuperado el 30 de julio de 2011, de www.ilo.org/wcmsp5/groups/ public/@ed_emp/.../ publication/wcms_114029.pdf
E-VIEWS 5.1 USER’S GUIDE (2005). Recuperado el 15 de abril de 2011, de www.eviews.com
E-VIEWS 6 USER’S GUIDE II (2007). Quantitative Micro Software, LLC, United States of America.
FU, X. (2005). Exports, Foreign Direct Investment and Employment: The Case of China. Recuperado el 10 de mayo de 2010, de: http://fed.ccer.edu.cn/pub/workingpaper/ 2005441572129663.pdf
GALINDO, L. M. & CARDERO, M. E. (1997). Un modelo econométrico de vectores autorregresivos y cointegración de la economía mexicana, 1980-1996. Economía Mexicana Nueva Época, 6(2), 223-247.
GUAJARATI, D. N. & PORTER, D. C. (2009). Basic Econometrics (5a. ed.). Singapur: Mc Graw-Hill.
ICEX (2009). Guía de organismos de apoyo a la inversión en Puerto Rico.
JAYARAMAN, T. K. & SINGH, B. (2007). Foreign Direct Investment and Employment Creation in Pacific Island Countries: An Empirical Study of Fiji. Asia-Pacific Research and Training Network on Trade. Working Paper, (35), 1-17.
JOHANSEN, S. & JUSELIUS, K. (1990). Maximum Likelihood Estimation and Inference on Cointegration – With Applications to the Demand for Money. Oxford Bulletin of Economics and Statistics, 52(2), 169-210.
JUNTA DE PLANIFICACIÓN DE PUERTO RICO (1982-1983). Apéndice Estadístico. Informe Económico al Gobernador. San Juan: PR.
JUNTA DE PLANIFICACIÓN DE PUERTO RICO (1990). Apéndice Estadístico. Informe Económico al Gobernador. San Juan: PR.
JUNTA DE PLANIFICACIÓN DE PUERTO RICO (2000). Apéndice Estadístico. Informe Económico al Gobernador. San Juan: PR.
JUNTA DE PLANIFICACIÓN DE PUERTO RICO (2010). Apéndice Estadístico. Informe Económico al Gobernador. San Juan: PR.
KRUGMAN, P. & OBSTFELD, M. (2009). International Economics Theory & Policy. United States of America: Pearson Addison Wesley.
LANKAUSKIENE, T. & TVARONAVICIENE, M. (2011). Interrelation of Countries Developmental. Level and Foreign Direct Investment Performance. Journal of Business Economics and Management, 12(3), 546-565.
LAWRENCE, R. Z. & LARA, J. (2006). Trade Performance and Industrial Policy. En S. M. Collins, B. P. Bosworth & M. A. Soto-Class (Eds.), The Economy of Puerto Rico: Restoring Growth. Washington, DC.: Brookings Institution Press.
MARTÍNEZ, J. M., MÁTTAR, J. & RIVERA, P. (2005). Globalización y desarrollo: Desafíos de Puerto Rico frente al siglo XXI. México, D.F.: Comisión Económica para América Latina y el Caribe (Cepal).
MICKIEWICZ, T., RADOSEVIC, S. & VARBLANE, U. (2000). The Value of Diversity: Foreign Direct Investment and Employment in Central Europe During Economic Recovery. ESRC “One Europe or Several?”, Working Paper, (05), 1-30.
OMAN, C. (2000). Policy Competition for Foreign Direct Investment. A Study of Competition Among Governments to Attract IED. Francia: OECD Publication Service.
ONARAN, O. (2007). Jobless growth in the Central and Eastern European Countries: A Country Specific Panel Data Analysis for the Manufacturing Industry. Viena, Austria: University of Economics - B.A., 1-34.
PFAFF, B. (2008). Analysis of Integrated and Cointegrated Time Series with R. Washington, DC: Springer.
PINDYCK, R. S. & RUBINFELD, D. I. (1991). Econometric Models & Economic Forecast. New York, NY: Mc Graw-Hill.
RIVERA APONTE, A. (2006). Cambio en la estructura industrial y ocupacional del empleo en el proceso de desarrollo económico de Puerto Rico (Tesis de doctoral inédita).
RODRÍGUEZ, C. A. (2002). Análisis dinámico de la economía de Puerto Rico con un modelo de vectores autorregresivos y cointegración. Series de Ensayos y Monografías, (110), 1-16.
RODRÍGUEZ, C. A. (2004a). Conceptos básicos y aspectos matemáticos sobre el análisis de raíces unitarias y cointegración. Ceteris Paribus, 4(9), 1-30.
RUIZ, A. L. (2004b). Un breve recuento histórico del desarrollo económico de Puerto Rico a partir de 1898. Enciclopedia de Puerto Rico Siglo 21. San Juan: PR: Caribe Groiler Inc.
RUIZ, A. L. (2006a). Cambio tecnológico e inversión en capital humano: Dos factores claves en los nuevos modelos de crecimiento económico. Boletín de la Asociación de Economistas de Puerto Rico, 1(1), 7-8.
RUIZ, A. L. (2006b). Limitaciones del modelo de desarrollo económico basado en importación de capital y tecnología externa orientado hacia la exportación. Boletín de la Asociación de Economistas de Puerto Rico, 1(3), 6-8.
SALEHIZADEH, M. (2005). Foreign Direct Investment Inflows and the US Economy: An Empirical Analysis. Economic Issues, 10(2), 29-50.
SEYF, A. (2000). Can more FDI Solve the Problem of Unemployment in the EU? A Short Note. Applied Economics Letters, 7(2), 125-128.
SIMS, C.A. (1980). Macroeconomics and Reality. Econometrica, 48(1), 1-46.
U.S. DEPARTMENT OF LABOR (2011). Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS).
VILA, R. (2005). La competencia comunicativa intercultural, un estudio en el primer ciclo de la ESO. Barcelona, España: Universitat de Barcelona.
ZHANG, Q. & FELMINGHAM, B. (2002). The Role of FDI, Exports and Spillover Effects in the Regional Development of China. The Journal of Development Studies, 38(4), 157-178.
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Published
Dec 15, 2012
Article Details
How to Cite
Basem-Hassan Lomabrdi, M., Juma’h, A. H., Cué García, F., Ruiz Mercado, Ángel L., & Lloréns Rivera, A. A. (2012). Foreign direct investment, exports, Gross Domestic Product and the labor market in Puerto Rico. Ecos De Economía, 16(35), 5–28. https://doi.org/10.17230/ecos.2012.35.1
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Author Biographies
Miriam Basem-Hassan Lomabrdi, Universidad Interamericana de Puerto Rico
Ph.D.c. Universidad Interamericana de Puerto Rico.Ahmad H. Juma'h, Universidad Interamericana de Puerto Rico
Catedrático de Finanzas y Contabilidad, Universidad Interamericana de Puerto Rico.Felix Cué García, Universidad Interamericana de Puerto Rico
Catedrático de Economía y Administración de Empresas, Universidad Interamericana de Puerto Rico.Ángel L. Ruiz Mercado, Universidad Interamericana de Puerto Rico
Catedrático de Economía, Universidad Interamericana de Puerto Rico.Antonio A. Lloréns Rivera, Universidad Interamericana de Puerto Rico
Catedrático Asociado de Economía, Universidad Interamericana de Puerto Rico.Authors who publish with this journal agree to the following terms:
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