The relations between foreign direct investment, government investment and unemployment (Ecuador 2003-2013)

Abstract

The unemployment rate gives a relative idea of the overall economic health of a country. This paper’s aim was to explore, understand and measure the positive or negative relationship between foreign direct investment and government investment with unemployment in Ecuador. The ordinary least square regression model was used to determine if there were any relations between the variables and to measure them. The databases used for this econometric analysis were generated and published by Ecuador’s Central Bank, the Ecuadorian National Institute of Statistics (INEC) and the National Secretariat of Planning and Development (SENPLADES). The results show significant relations between government investment and unemployment. On the contrary, there is no relationship between foreign direct investment and unemployment for the Ecuadorian case.