An Assessment of How the Informal Labour Markets Affect the Inflow and Outflow of FDI Across 28 Developed and Developing Countries

This project tries to analyze the effects of the informal labor markets on the FDI inflows and outflows from the economy. There are other factors too that are affecting the Foreign Direct Investment (FDI) such as labor cost, corruption, GDP etc which need to be controlled. This study doesn?t control such variables but only take into account the informal labor force. The study is done across 28 developed and developing countries and a time period of 26 years. Data are collected from United Nations Conference on Trade and Development (UNCTAD) and World Bank. Focus of the analysis is to test the unit specific fixed effect that is affecting the dependent variable over and above the explanatory variables. The study is also extended to Arellano Bond Estimation.