Financial sector has experienced significant expansion together with accelerating financial globalization in recent years and  had important positive and negative implications for all the economies. This study investigates the interaction among unemployment, financial development and domestic investment in 16 emerging market economies during 2001-2014 period using panel data analysis. We found that there was long relationship among the variables and both domestic and foreign direct investment had negative impact on unemployment. Furthermore, there was one-way causal relationship from development of financial sector to unemployment.


financial development, unemployment, panel data analysis

JEL Codes

C33, E24

Full Text:



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