The role of foreign direct investment and employment in North Africa : does sectoral composition of FDI matter?

Abstract

This study examines the heterogeneous employment effects of foreign direct investment (FDI) in North Africa, focusing on sectoral distinctions (primary, manufacturing, services), demographic impacts (youth, female, total employment), and regional dynamics from 2003 to 2020. Using panel data and random effects models, the findings highlight that manufacturing FDI has the broadest employment impact, while primary-sector FDI particularly benefits youth employment. Service-sector FDI boosts female and total employment but not youth employment. The study emphasizes the need for targeted FDI policies to promote inclusive economic growth by prioritizing youth and female employment.