The effect of export and foreign direct investment on women's employment: The case of Türkiye

ABSTRACT The fact that women's labor is not sufficiently evaluated in the labor market causes women's employment rates to remain low. Women's low labor force participation rate in Turkey is directly related to cultural and social factors and economic variables. In particular, the effect of macroeconomic indicators such as foreign direct investment (FDI), export, and gross domestic product (GDP) on women's employment is of great importance in understanding women's role in the labor market. The increasing or limiting effects of these economic factors on women's employment are a subject that needs to be examined. This study examines the relationships between women's employment and foreign direct investment, export, and economic growth (GDP) in Turkey by considering the period 1988-2023. With the time series analysis methods used in the study, the stationarity of the series was evaluated with ADF, PP, and KPSS unit root tests; long-term relationships between the series were examined with the ARDL bounds test. According to the results, it was determined that FDI and exports had a negative effect on women's employment in the long term, while GDP had a positive impact. In addition, the short-term error correction model (ECT) provided a reliable analysis of short-term relationships between the series. FMOLS, DOLS, and CCR methods were applied for a more precise estimation of long-term cointegration relationships, and it was determined that the results obtained from these models were consistent with the ARDL bounds test findings. Granger causality tests revealed that GDP has a unidirectional causal effect on female employment and exports, but FDI and exports do not directly affect female employment. Variance decomposition and impulse-response analyses showed that changes in female employment are mainly due to internal dynamics, while the effect of GDP increases over time. On the other hand, the impact of FDI and exports were determined to be limited and variable.