The effects of foreign direct investment on youth unemployment in the Southern African Development Community

Figures & data

Table 1. Descriptive statistics of the regression variables, 1994–2017.

Variable	Description	Mean (n = 144)	Std. Dev.
Foreign Direct Investment	Net inflows (% of GDP)	3.28	3.13
GDP growth	GDP growth (annual %)	3.96	3.92
Inflation	Consumer Prices (annual %)	193.01	1980.47
Domestic investment	Gross Capital Formation (% of GDP)	19.94	8.20
External debt	External Debt Stocks (% of GNI)	56.89	60.31
Population growth	Population Growth (annual %)	2.51	0.70
Exports	Exports of goods and services (% of GDP)	34.61	16.37
Imports	Imports of goods and services (% of GDP)	41.50	16.57
Technology Gap	The gap between the US GDP per capita and host country GDP per capita divided by host country GDP per capita	76.38	51.77
SADC Membership	Dummy Variable taking the value of 1 for every year a country has been a member of SADC and zero otherwise	0.90	0.31
Youth unemployment	Youth total (% of total labour force ages 15–24) modelled ILO estimates	18.58	16.53

Source: Author’s calculations.

Table 2. Estimation results of the factors affecting youth unemployment in SADC.

	Fixed effect estimates	FGLS-Parks regression estimates	Prais-Winsten regression (PCSE) estimates
Foreign Direct Investment	0.10	−0.01	−0.06
	(0.10)	(0.03)	(0.07)
GDP growth	0.11	−0.07***	−0.10**
	(0.08)	(0.03)	(0.05)
Inflation	−0.00	−0.00	−0.00
	(0.00)	(0.00)	(0.00)
Domestic Investment	−0.03	−0.04	−0.12**
	(0.07)	(0.03)	(0.05)
External debt	0.01	−0.01***	−0.02***
	(0.01)	(0.00)	(0.01)
Population growth	0.17	−2.12***	−2.43***
	(0.78)	(0.48)	(0.87)
Exports	−0.22***	0.02	0.03
	(0.06)	(0.04)	(0.06)
Imports	−0.04	0.02	0.07
	(0.06)	(0.03)	(0.06)
Technology Gap	−0.00	−0.18***	−0.22***
	(0.03)	(0.02)	(0.02)
SADC Membership	−2.33	−0.49	−0.14
	(1.61)	(0.91)	(1.17)
Constant	29.24***	36.42***	41.66***
	(4.38)	(2.72)	(3.88)
N	144	144	144
rho (fraction of variance due to u_i)	0.98		0.84
F(10,128)	5.63
corr(u_i, Xb)	−0.90
Wald chi^2(10)		123.70***	140.71***

Standard errors in parentheses *p < 0.10, **p < 0.05, ***p < 0.01.

Table A1. Panel Unit Root tests

	Tests assuming common unit root process		Tests assuming individual unit root process
	LLC t-stat statistic	Breitung t-stat statistic	IPS W-statistic	ADF-Fisher Chi^2 statistic	PP-Fisher Chi^2 Statistic
Foreign direct investment	−6.79 I(1)	−2.93 I(0)	−4.72 I(0)	11.20 I(0)	11.20 I(0)
GDP growth	−2.56 I(0)	−3.59 I(0)	−5.49 I(0)	16.42 I(0)	16.42 I(0)
Inflation	−5.29 I(5)	−1.95 I(1)	−5.12 I(0)	18.98 I(0)	18.98 I(0)
Domestic investment	−6.89 I(1)	−1.82 I(0)	−2.85 I(0)	2.08 I(0)	2.08 I(0)
External debt	−1.95 I(0)	−5.17 I(0)	−2.36 I(0)	2.34 I(0)	2.34 I(0)
Population growth	−8.65 I(0)	−3.00 I(2)	−3.36 I(0)	11.52 I(0)	11.52 I(0)
Exports	−3.12 I(0)	−1.90 I(0)	−2.76 I(0)	16.45 I(1)	16.45 I(0)
Imports	−5.67 I(1)	−6.19 I(1)	−2.42 I(0)	2.57 I(0)	2.57 I(0)
Technology Gap	−3.44 I(0)	−2.75 I(1)	−4.08 I(1)	10.39 I(1)	10.39 I(1)
SADC Membership	−5.45 I(4)	−4.58 I(1)	*	3.84 I(1)	3.84 I(1)
Youth unemployment	−1.83 I(0)	−3.06 I(1)	−2.21 I(0)	11.30 I(1)	11.31 I(1)

Note: All results are at 5% level of significance and * means the test statistic was not computed due to normality error.