Impact of industrialization on unemployment in 91 countries globally: an approach with modern cointegration and causality techniques

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Published: feb. 5, 2022

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Leidy Acaro
Carrera de Economía, Universidad Nacional de Loja, Loja, Ecuador
Karen Iñiguez
Carrera de Economía, Universidad Nacional de Loja, Loja, Ecuador

Abstract

The industrialized dynamics of the economies has made it possible to reduce unemployment levels and at least control them, so the objective of this research is to define the impact of industrialization on unemployment in 91 countries of the world classified by income levels within the 1990 period. -2016 using panel data and cointegration techniques. Development indicators from the World Bank (2017) were taken. By using the cointegration techniques of Pedroni (1999) and Westerlund (2007), it was found that there is a long- and short-term equilibrium, respectively. When applying the Pedroni (2001) DOLS model, it was found that there is a strength of the cointegration vector in the countries at the individual level, and when using the Pedroni (2001) PDOLS model, it was established that there is a strength of the cointegration vector for each group of countries globally. The results of the Dimietry and Hurlin (2012) causality test indicate that there is two-way causation and one-way causation. The policy implications are focused on the design of adequate and environmentally friendly infrastructures to achieve efficient industrial development in each country and reduce unemployment levels; in addition to carrying out industrial management models that establish a suitable location for the industries in each country.

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How to Cite
Acaro, L., & Iñiguez, K. (2022). Impact of industrialization on unemployment in 91 countries globally: an approach with modern cointegration and causality techniques. Revista Económica, 9(2), 66–78. Retrieved from https://revistas.unl.edu.ec/index.php/economica/article/view/1211
Issue
Vol. 9 No. 2 (2021): RVE Vol 9 (July - December 2021)
Section
RESEARCH ARTICLES
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