This research seeks to empirically examine the impact of Foreign Direct Investment )FDI( on real wages in Egypt. First, we test the effect of FDI on real wages on the whole economy, and then special attention is given to the basic sectors in the economy. For this purpose, we make use of time-series Autoregressive Distributed Lag (ARDL) models utilizing annual data covering the period 1985-2014. Our results reveal that FDI positively affects the average wages in the long-run in almost all conducted models. According to the sectoral models, the highest long-run effect of FDI on wages is detected in the manufacturing sector, while it is insignificant in the tourism sector. Attracting more FDI in general and manufacturing FDI in particular is recommended as this will have a positive effect on average wages and consequently raise the economy’s output and overall income.
Topics in Middle Eastern and North African Economies
Middle East Economic Association and Loyola University Chicago
Abouelfarag, Hanan A. and Abed, Mohamed S., "The Impact of Foreign Direct Investment on Real Wages in Egypt: A Sectoral Empirical Analysis". Topics in Middle Eastern and North African Economies, electronic journal, 20, 2, Middle East Economic Association and Loyola University Chicago, 2018, http://www.luc.edu/orgs/meea/
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