Impact of FDI Inflow on Average Wage and Employment in Serbia

Abstract

Research question: This research comes to examine the impact of FDI inflow on average wage and on employment in Serbia in the period 2005-2017. Motivation: FDI tendentiously increases the economic growth rates, taking into consideration the fact that developed economies benefit from FDI because their local institutions are more productive, while developing countries benefit from “pieces“ of FDI, i.e., dissemination of technology and rarely evoke some relevant progress in economic growth. Despite the growing research in the FDI field, the scientific literature on average wage and employment in relation to FDI Inflow in Serbia is limited, which is the motivation to conduct this research. Idea: Therefore, the aim of this research is to estimate the relationship between FDI Inflow and average wage and employment. Data: The data are obtained from the official sites of the National Bank of Serbia and from the Statistical Office of Serbia. Tools: The methodology used is the multiple Linear Regression Model, applying the IBM SPSS software, in order to identify the impact of FDI Inflow on average wage and on employment using time lags. Findings: The results prove the absence of significant impact of FDI inflow on average wage and on employment within the country. The highest positive impact of FDI inflow appears to be in the year the inflow occurs for average wage, and in the second year of FDI inflow performance for employment. Contribution: This paper contributes to the awareness of low impact of FDI inflow on average wage and on employment in Serbia. Moreover, this research covers the gap in the literature in the field of FDI inflow in relation to average wage and employment within the country