Jayade an, C. M.; Hoang, Nam; Ya am, Subba Reddy
A icle
In e ac ion e ec o economic globaliza ion and income
pe capi a on unemploymen
Economies
P o ided in Coope a ion wi h:
MDPI – Mul idisciplina y Digi al Publishing Ins i u e, Basel
Sugges ed Ci a ion: Jayade an, C. M.; Hoang, Nam; Ya am, Subba Reddy (2025) : In e ac ion e ec
o economic globaliza ion and income pe capi a on unemploymen , Economies, ISSN 2227-7099,
MDPI, Basel, Vol. 13, Iss. 3, pp. 1-28,
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Ci a ion: CM, J., Hoang, N. T., &
Ya am, S. R. (2025). In e ac ion E ec
o Economic Globaliza ion and
Income pe Capi a on Unemploymen .
Economies,13(3), 72. h ps://doi.o g/
10.3390/economies13030072
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A icle
In e ac ion E ec o Economic Globaliza ion and Income pe
Capi a on Unemploymen
Jayade an CM * , Nam T ung Hoang and Subba Reddy Ya am
Depa men o Economics, UNE Business School, Uni e si y o New England, A midale, NSW 2351, Aus alia;
[email p o ec ed] (N.T.H.); [email p o ec ed] (S.R.Y.)
*Co espondence: [email p o ec ed]
Abs ac : A Kuzne s-like cu e o unemploymen sugges s ha unemploymen ini ially
ises wi h ea ly economic de elopmen due o sec o al shi s bu dec eases as economies
ma u e, di e si y, and adap . This explains how g oss na ional income (GNI) pe capi a
in luences o media es he e ec o globaliza ion on unemploymen . This s udy in es i-
ga es he impac o he in e ac ion be ween GNI pe capi a and economic globaliza ion on
unemploymen a es in 158 coun ies om 1991 o 2019 using he spa ial Du bin model
(SDM) and a weigh ma ix based on cul u al, poli ical, social, language, and his o ical
backg ounds and ade pac s (CPSLHT) o be e es ima es. The esul s indica e ha
he di ec and indi ec e ec s o g oss domes ic p oduc (GDP) on unemploymen a e
nega i e and signi ican in he sho and long e m. Popula ion g ow h posi i ely and
signi ican ly impac s unemploymen , while emale labo o ce pa icipa ion shows nega i e
and signi ican indi ec e ec s. The ne mig a ion e ec is nega i e bu insigni ican in he
o e all model and becomes signi ican in he decomposed globaliza ion models. The di ec
and indi ec e ec s o in la ion we e consis en ly nega i e and signi ican . T ade open-
ness exe s a signi ican indi ec nega i e e ec on unemploymen , while he in e ac ion
be ween GNI pe capi a and economic globaliza ion, especially h ough ade and o eign
di ec in es men , also educes unemploymen . Pe sis en unemploymen and spa ial
spillo e e ec s highligh he impo ance o egional coope a ion. Con olling popula ion
g ow h, enhancing GDP g ow h, pe mi ing mild in la ion, p omo ing emale wo k o ce
pa icipa ion, and adop ing e ec i e mig a ion policies can educe global unemploymen .
Keywo ds: unemploymen ; economic globaliza ion; o eign di ec in es men ; ade
openness
;
Hecksche –Ohlin e ec ; in la ion
1. In oduc ion
Globaliza ion is i al o economic g ow h as i in eg a es di e en economies, cul u es,
echnologies, and go e nance, c ea ing in e dependence ac oss coun ies. This p omo es
he di usion o echnology, inno a ion, and e icien alloca ion o esou ces. S udies by
Madanizadeh and Pil a (2019), Rashidi (2022), Gozgo (2017), and Nwosa e al. (2020)
consis en ly showed ha inc eased ade openness educes unemploymen and boos s labo
pa icipa ion ac oss a ious coun ies. Haze a-Tun-Nessa e al. (2021) and Al-Taie e al.
(2023) ound ha ade openness inc eases unemploymen . Pal and Villan henkoda h (2024)
ound ha economic globaliza ion inc eases long- e m unemploymen in low-income
coun ies bu p omo es job c ea ion and educes unemploymen in high- and middle-
income coun ies om 1991 o 2020.
This s udy examines he hypo hesis ha ich coun ies wi h high economic g ow h
and s ong economic globaliza ion can educe unemploymen by c ea ing mo e job op-
Economies 2025,13, 72 h ps://doi.o g/10.3390/economies13030072
Economies 2025,13, 72 2 o 28
po uni ies h ough inc eased labo demand, a ac ing o eign in es men , and u ilizing
immig a ion o ill labo sho ages. In hese coun ies, economic g ow h ypically d i es
he expansion o indus ies and se ices, which equi es a la ge wo k o ce. As compa-
nies g ow, hey need mo e employees, educing hei unemploymen a es. Addi ionally,
globaliza ion allows hese coun ies o access la ge in e na ional ma ke s, inc ease ade
and business oppo uni ies, and s imula e job c ea ion. This s udy examines se e al e-
sea ch ques ions. Does economic globaliza ion a ec he unemploymen a e? Is he e a
spillo e e ec in o he coun ies? Does he in e ac ion be ween economic globaliza ion
and economic de elopmen o g oss na ional income (GNI) pe capi a a ec he unemploy-
men a e? This ques ion e alua es he impac o he in e ac ion e ec be ween economic
globaliza ion and GNI pe capi a on unemploymen a es using ex ensi e da ase s o
158 coun ies co e ing 29 yea s om 1991 o 2019.
The impac o he in e ac ion e ec be ween economic globaliza ion and GNI pe
capi a on unemploymen e lec s how he ela ionship be ween economic globaliza ion and
unemploymen a ies depending on a coun y’s le el o economic de elopmen . Speci i-
cally, i shows whe he he e ec s o economic globaliza ion on unemploymen a es a e
s onge , weake , o di e en in coun ies wi h high GNI pe capi a han in hose wi h
lowe GNI pe capi a. In ich (high-GNI) coun ies, economic globaliza ion may lead o
lowe unemploymen a es because hese coun ies ypically ha e mo e obus economies,
ad anced in as uc u e, and well-de eloped labo ma ke s. These coun ies a e be e
posi ioned o capi alize on he bene i s o economic globaliza ion, such as inc eased ade,
o eign di ec in es men (FDI), and echnological ad ances. They can adjus o shi s in
global demand, di e si y hei indus ies, and e ain wo ke s who may be displaced by
global compe i ion. In poo (low-GNI) coun ies, he in e ac ion e ec may indica e ha
economic globaliza ion has a mo e nega i e o weake e ec on unemploymen . These
coun ies o en ace g ea e challenges in managing he dis up i e impac s o economic
globaliza ion. Fo example, poo na ions may expe ience highe unemploymen as indus-
ies s uggle o compe e globally, and labo ma ke s may no be equipped o handle he
changes b ough abou by economic globaliza ion. Addi ionally, hese coun ies may lack
he necessa y social sa e y ne s o ins i u ional capaci y o cushion he nega i e e ec s o
economic globaliza ion, esul ing in mo e job losses.
In essence, he in e ac ion e ec helps explain why he consequences o economic
globaliza ion on unemploymen a e no uni o m ac oss all na ions. This unde sco es how
economic de elopmen , as measu ed by GNI pe capi a, in luences a coun y’s abili y
o bene i om economic globaliza ion and manage i s po en ial dis up ions o he labo
ma ke . Coun ies wi h a highe GNI pe capi a may expe ience mo e a o able ou comes
om economic globaliza ion, while hose wi h a lowe GNI pe capi a may ace mo e
signi ican challenges, po en ially leading o highe unemploymen .
Economic globaliza ion can a ec unemploymen a es h ough a ious mechanisms,
including ade libe aliza ion, ou sou cing, and o eign di ec in es men (FDI). As coun-
ies engage in global ade, indus ies acing in e na ional compe i ion may expe ience job
losses, while hose bene i ing om global ma ke s may expe ience employmen g ow h.
Ou sou cing and o sho ing can also lead o job displacemen in high-cos coun ies,
whe eas FDI can c ea e jobs in hos na ions, al hough i may inc ease wage dispa i ies.
Economic globaliza ion can ha e spillo e e ec s, wi h economic shi s in one coun y
in luencing o he s, pa icula ly h ough dis up ions in global supply chains. The ela-
ionship be ween economic de elopmen (GNI pe capi a) and economic globaliza ion
u he complica es he pic u e o unemploymen . Weal hie coun ies, wi h highe GNI
pe capi a, end o expe ience mo e economic globaliza ion bu may cushion i s nega i e
e ec s wi h s onge social sa e y ne s and labo ma ke policies, while less-de eloped
Economies 2025,13, 72 3 o 28
coun ies may be mo e ulne able o global economic p essu es. Empi ical analysis using
ex ensi e da ase s o 158 coun ies o e 29 yea s (1991–2019) could explo e hese dynamics
by examining how ade openness, FDI, and o he globaliza ion measu es co ela e wi h
unemploymen , ac o ing in he mode a ing e ec s o GNI pe capi a and local policies.
S a is ical echniques such as spa ial econome ics can be used o assess globaliza ion’s
di ec and spillo e e ec s on unemploymen ac oss di e en na ions.
Immig a ion is c i ical in suppo ing labo ma ke s in weal hy coun ies by helping
add ess skill gaps and labo sho ages. Immig an s o en ake jobs in sec o s wi h ewe
local wo ke s, anging om low-skilled labo in ag icul u e and cons uc ion o highly
skilled posi ions in echnology and heal hca e. By a ac ing skilled labo om ab oad, hese
coun ies can main ain a dynamic wo k o ce, which helps o keep unemploymen a es
low. Howe e , he ex en o his e ec depends on ac o s such as go e nmen immig a ion
policies, economic inclusion, and how well he labo o ce is equipped wi h he necessa y
skills o mee e ol ing ma ke demands.
The ela ionship be ween economic globaliza ion and g oss na ional income (GNI)
pe capi a is mul i ace ed and a ies ac oss coun ies. The in e ac ion e ec o economic
globaliza ion and GNI pe capi a shows ha ich coun ies ha e high economic g ow h,
as ep esen ed by a highe GNI pe capi a and high economic globaliza ion. In compa -
ison, poo coun ies ha e low economic g ow h, ep esen ed by a lowe GNI pe capi a
and lowe economic globaliza ion. While many high-income na ions exhibi signi ican
economic globaliza ion and a high GNI pe capi a, he dynamics in low-income coun ies
a e mo e complex.
In weal hie na ions, economic globaliza ion o en co ela es wi h a highe GNI pe
capi a, as hese coun ies ypically ha e obus ins i u ions, ad anced in as uc u e, and
a skilled wo k o ce ha enables hem o capi alize on global ade and in es men op-
po uni ies. In con as , he ela ionship be ween economic globaliza ion and GNI pe
capi a in low-income coun ies is mo e complex. While globaliza ion can p o ide access
o new ma ke s and echnologies, i can expose hese coun ies o economic ola ili y and
inc eased compe i ion.
Globaliza ion gene ally p omo es economic g ow h and e iciency h ough in e na-
ional coope a ion, and i s e ec s can a y g ea ly depending on a coun y’s le el o
economic de elopmen . The g oss na ional income (GNI) pe capi a measu es a coun y’s
o e all economic de elopmen , e lec ing he a e age income o i s ci izens. While many
s udies ha e independen ly ocused on ade openness o globaliza ion, his s udy empha-
sizes he in e ac ion be ween globaliza ion and he GNI pe capi a. A Kuzne s-like cu e o
unemploymen sugges s ha in he ea ly s ages o economic de elopmen , unemploymen
may ise due o sec o al shi s, bu as economies ma u e and di e si y, unemploymen de-
c eases wi h imp o ed job oppo uni ies and wo k o ce adap a ion. I aims o unde s and
how economic de elopmen , as measu ed by GNI pe capi a, in luences and modi ies he
e ec s o globaliza ion on unemploymen .
This s udy iden i ies and quan i ies how pe capi a GNI media es he ela ionship
be ween globaliza ion and unemploymen . This sugges s ha in coun ies wi h highe GNI
pe capi a, globaliza ion migh lead o mo e posi i e ou comes (lowe unemploymen ),
whe eas in coun ies wi h lowe GNI pe capi a, he e ec s could be mo e mixed o e en
nega i e. This in e ac ion is c ucial o policymaking, implying ha a one-size- i s-all
app oach o managing globaliza ion’s impac s migh no be e ec i e.
The in e ac ion be ween GNI pe capi a and globaliza ion on unemploymen can be
unde s ood h ough in ui i e obse a ions and heo e ical amewo ks. While ising GNI
pe capi a is gene ally associa ed wi h economic g ow h and job c ea ion, globaliza ion
in oduces complexi ies ha can c ea e and displace jobs, leading o nuanced e ec s on un-
Economies 2025,13, 72 4 o 28
employmen . Unde s anding hese dynamics is essen ial o o mula ing e ec i e economic
policies o p omo e sus ainable employmen g ow h in a globalized economy.
The spa ial app oach enhances ou unde s anding o he impac o globaliza ion on
unemploymen by examining how a ious ac o s in luence labo dynamics. I allows
o iden i ying geog aphical pa e ns and dispa i ies in unemploymen a es, p o iding
insigh s in o how di e en a eas a e a ec ed by global economic o ces.
1.1. In ui i e Reasoning
A highe GNI pe capi a indica es a p ospe ous economy ha o en leads o job
c ea ion. As GNI inc eases, businesses may expand, in es in new echnologies and
capi al-in ensi e indus ies, and inc ease hei wo k o ce, he eby educing unemploymen .
Capi al-in ensi e indus ies o en in ol e complex p oduc ion p ocesses ha equi e sig-
ni ican in es men in echnology and machine y. Capi al-abundan coun ies (e.g., he
Uni ed S a es) end o specialize in and expo capi al-in ensi e goods because hey ha e
mo e capi al han labo . Consequen ly, hese indus ies end o yield highe p oduc i i y
pe wo ke and sus ain highe wages. This access can help local businesses o g ow and
hi e mo e employees.
Con e sely, in he con ex o lowe GNI, economic g ow h may be sluggish, leading
o highe unemploymen a es. Globaliza ion allows coun ies o access la ge ma ke s
and acili a e ade and in es men . Labo -in ensi e indus ies a e ypically mo e s aigh -
o wa d and ely on manual labo , which can lead o lowe p oduc i i y pe wo ke bu
highe employmen le els. Labo -abundan coun ies (e.g., Bangladesh) specialize in and
expo labo -in ensi e goods because o hei la ge labo o ce han capi al.
The lack o globaliza ion es ic s ma ke oppo uni ies and job c ea ion. Globaliza-
ion has shi ed economies om adi ional o compe i i e sec o s, c ea ing new jobs bu
displacing wo ke s in declining indus ies and causing sho - e m unemploymen . In-
c eased compe i ion imp o es e iciency and lowe s p ices bu may lead o i m closu es
and sho - e m unemploymen .
1.2. Theo e ical F amewo k
T ade heo ies on economic de elopmen and g ow h explain how in e na ional ade
in luences a coun y’s economic p ospe i y, g ow h ajec o y, and o e all de elopmen .
These heo ies examine how exchanging goods, se ices, capi al, and labo ac oss bo de s
impac s a ious aspec s o an economy, such as p oduc ion, income dis ibu ion, echnolog-
ical ad ancemen , and esou ce alloca ion. The o e a ching pu pose o hese heo ies is
o help unde s and he condi ions unde which ade os e s economic de elopmen and
how di e en na ions can bene i om global ade depending on hei economic s uc u es
and policies.
Se e al economic heo ies suppo he in e ac ion be ween globaliza ion and GNI
pe capi a conce ning unemploymen , and he Kuzne s hypo hesis sugges s ha income
inequali y i s inc eases and hen dec eases as an economy de elops. Du ing he ea ly
s ages o globaliza ion and economic de elopmen (when GNI pe capi a is low), wo ke s
in adi ional sec o s may lose jobs as indus ies mode nize. As he economy g ows (highe
GNI), new job oppo uni ies in mode n sec o s may dec ease unemploymen .
The Hecksche –Ohlin model sugges s ha coun ies expo goods by using abun-
dan p oduc ion ac o s. As a coun y globalizes and inc eases i s GNI pe capi a, i may
specialize in indus ies wi h compa a i e ad an ages. This specializa ion can c ea e new
job oppo uni ies while displacing jobs in less compe i i e sec o s, leading o complex
in e ac ions wi h unemploymen a es. As GNI pe capi a ises, educa ion and skill de el-
Economies 2025,13, 72 5 o 28
opmen become mo e c i ical, po en ially educing unemploymen o skilled wo ke s and
inc easing i o unskilled wo ke s, hus highligh ing he in e ac ion e ec .
By examining he in e ac ion be ween GNI pe capi a and economic globaliza ion,
his s udy con ibu es o a deepe unde s anding o how economic de elopmen le els
shape a coun y’s abili y o ha ness o mi iga e he e ec s o globaliza ion, pa icula ly in
e ms o labo ma ke s and employmen ou comes. This insigh could help policymake s
ailo s a egies be e sui ed o hei coun ies’ economic con ex s, ensu ing ha glob-
aliza ion bene i s a b oade segmen o socie y and mi iga es he isks associa ed wi h
economic in eg a ion.
The globaliza ion index includes poli ical, social, and economic dimensions, wi h
highe alues indica ing g ea e globaliza ion. Economic globaliza ion has wo dimensions:
ade, capi al es ic ions, and ac ual economic lows. The sub-indexes o ac ual economic
lows include po olio in es men da a, o eign di ec in es men (FDI), and ade. The
sub-index o capi al es ic ions conside s axes on in e na ional ade, hidden impo
ba ie s, he index o capi al con ols, and mean a i a es (Haelg,2019;Gygli e al.,2019).
1.3. Spillo e E ec s o Economic Globaliza ion
We examine he impac o economic globaliza ion on unemploymen a es wi hin a
spa ial amewo k. This s udy also assesses he impac o economic globaliza ion and he
in e ac ion e ec o economic globaliza ion and GNI pe capi a on unemploymen a es.
This s udy employs al e na i e spa ial weigh ing measu es, such as he cul u al, linguis ic,
and his o ical ela ions o coun ies and hei ade pac s, in addi ion o he neighbo hood.
This esea ch is suppo ed by a ious ade heo ies, such as Classical T ade Theo ies,
including compa a i e ad an age (Rica do) and ac o p opo ions (Hecksche –Ohlin), o
explain how GNI pe capi a in luences ade pa e ns. K ugman (1979,1980) emphasizes
economies o scale and p oduc di e en ia ion, pa icula ly how globaliza ion in e ac s
wi h income le els o a ec ade dynamics. This sugges s ha ade can a ise om i ms
seeking economies o scale, leading o specializa ion and in a-indus y ade among simila
coun ies. This heo y emphasizes he ole o ma ke s uc u es, consume p e e ences,
and globaliza ion in shaping ade pa e ns, os e ing compe i ion, and d i ing inno a ion.
The Endogenous G ow h Theo y conside s how human capi al and globaliza ion can lead
o echnological ad ancemen s and inc eased GNI pe capi a h ough ade. Wi h he
suppo o mul iple heo ies, his s udy p o ides a mo e comp ehensi e unde s anding
o he complex in e ac ions be ween economic de elopmen (GNI pe capi a), economic
globaliza ion, and unemploymen ou comes.
Ou analysis includes se e al con ol a iables o be e explain he ac o s in luencing
unemploymen . These a iables include GDP, which e lec s a coun y’s o e all economic
ac i i y and abili y o gene a e jobs. We also accoun o in la ion, as changes in p ice
le els can impac wage g ow h, hi ing p ac ices, and popula ion, which in luence labo
supply and po en ial unemploymen le els. Addi ionally, emale wo k o ce pa icipa ion is
conside ed, e lec ing gende dynamics in he labo ma ke , and ne mig a ion is included
o cap u e he e ec s o labo mo emen on employmen oppo uni ies. These con ol a i-
ables p o ide a comp ehensi e unde s anding o he ac o s in luencing unemploymen .
This s udy makes se e al signi ican con ibu ions o he li e a u e by analyzing he
spillo e e ec s o economic globaliza ion on unemploymen using he spa ial Du bin
model (SDM), which accoun s o spa ial in e dependencies be ween coun ies. I also
explo es he in e ac ion be ween economic globaliza ion and GNI pe capi a in in luencing
unemploymen a es, o e ing insigh s in o how ade openness and economic de elopmen
join ly impac unemploymen . A key inno a ion o his s udy is he cons uc ion o a no el
weigh ma ix ha conside s coun ies wi h simila cul u al, poli ical, social, linguis ic, and
Economies 2025,13, 72 6 o 28
his o ical backg ounds, ade pac s, and neighbo hood ies. This app oach p o ides a mo e
comp ehensi e amewo k o unde s anding economic in e dependencies han adi ional
models, which p ima ily ocus on geog aphical o economic p oximi y. By inco po a ing
hese ac o s, his s udy add esses he gaps in p e ious non-spa ial esea ch and highligh s
he complex, mul idimensional na u e o he ela ionship be ween economic globaliza ion
and GNI pe capi a on unemploymen .
This s udy analyzes he spillo e e ec o economic globaliza ion on he unemploy-
men a e using he spa ial Du bin model (SDM). This s udy also in es iga es he in e ac ion
impac o economic globaliza ion and GNI pe capi a on unemploymen a es. This in e ac-
ion e ec indica es how economic de elopmen and ade heo ies explain he e ec s o
ade openness on he unemploymen a e. This s udy inco po a es a new weigh ma ix
cons uc ed o coun ies wi h simila cul u al, poli ical, social, language, and his o i-
cal backg ounds and ade pac s (CPSLHT) as well as neighbo hoods, making he s udy
unique and no el. Mos p e ious s udies we e non-spa ial; he e o e, spillo e e ec s we e
no analyzed.
The emainde o his pape is o ganized as ollows. The Sec ion 2p esen s a b ie
e iew o he li e a u e on his opic. Sec ion 3p esen s he da a se , empi ical model, and
econome ic me hods used in he analysis. The Sec ion 4p esen s s a is ical e idence on
he in e ac ion e ec o GNI pe capi a and EGLOBI (o GNI pe capi a and FDI o TRADE
Openness) on unemploymen a es and he esul s o spa ial panel s a is ical me hods. The
Sec ion 5concludes he pape .
2. Li e a u e Re iew
Recen de elopmen s in spa ial li e a u e ha e expanded he unde s anding o spa ial
econome ics, wi h nume ous s udies del ing in o a ious aspec s o con empo a y spa ial
esea ch. Al hough hese s udies examine a wide ange o opics, hey o en do no di ec ly
add ess he impac o economic globaliza ion on unemploymen . Mahmood (2023) used
he spa ial Du bin model o analyze he e ec s o o eign di ec in es men (FDI), expo s,
and impo s o emissions in La in Ame ica om 1970 o 2019.
The e ec o globaliza ion on unemploymen emains complex, and i s impac di e s
ac oss coun ies and egions. T ade heo ies, such as Rica do’s concep o compa a i e
ad an age, a gue ha specializa ion and e icien esou ce use can educe unemploymen ,
bene i ing coun ies wi h na u al ad an ages. Howe e , coun ies lacking such ad an ages
may no expe ience simila educ ions in unemploymen (Al ine e al.,2018). In con as ,
Helpman e al. (2010) sugges ed ha globaliza ion leads o lowe unemploymen , a iew
also suppo ed by Janiak (2007).
On he o he hand, Mi a and Ranjan (2010) ound a nega i e ela ionship be ween
globaliza ion and unemploymen . Howe e , Moo e and Ranjan (2005) and Sene (2001)
could no es ablish a consis en ela ionship be ween he wo. A s udy by Awad and Yousso
(2016) looked a how he Malaysian labo ma ke esponded o globaliza ion be ween 1980
and 2014. Using he au o eg essi e dis ibu ed lag me hod, hey ound ha economic
globaliza ion signi ican ly educed unemploymen in Malaysia.
Gozgo (2017) ex ended he analysis o 85 coun ies om 1991 o 2014 and concluded
ha globaliza ion ends o educe he s uc u al unemploymen a e. Simila ly, Al ine
e al. (2018) s udied 16 eme ging ma ke economies om 1991 o 2014, inding mixed
esul s. Globaliza ion was linked o highe unemploymen a es in Colombia, Hunga y,
India, Malaysia, Poland, Sou h A ica, and Tu key. Howe e , i educed unemploymen in
coun ies like China, Indonesia, Pakis an, he Philippines, B azil, Mexico, Pe u, and Russia.
The ela ionship be ween globaliza ion and you h unemploymen was also explo ed
in a s udy co e ing 50 A ican coun ies om 1994 o 2013 using he Gene alized Me hod
Economies 2025,13, 72 7 o 28
o Momen s (GMM). The esul s indica ed g ea e openness o global ma ke s co ela ed
wi h lowe you h unemploymen (Awad,2019). Simila ly, Ca è e e al. (2020) s udied 107
coun ies om 1995 o 2009, inco po a ing sec o -speci ic sea ch-and-ma ching ic ions
in o a Rica dian model. Thei indings e ealed ha ade could inc ease unemploymen
in coun ies wi h compa a i e ad an ages in low-e iciency sec o s, bu ade educed
unemploymen in coun ies wi h high-e iciency sec o s.
Elho s and Emili (2022) examined 12 p o inces in he Ne he lands om 1974 o 2018
and obse ed ha he deg ee o which spillo e e ec s om neighbo ing coun ies and
ou pu mul iplie s a e ac o ed in o economic analysis in luences how economic g ow h can
educe unemploymen . Du e al. (2009) showed ha ade openness nega i ely co ela es
wi h unemploymen , while p o ec ionis policies ha e he opposi e e ec , leading o highe
unemploymen . Thei obus esul s ac oss a ious models lended weak suppo o he
Hecksche –Ohlin heo y ega ding ade–unemploymen ela ionships, sugges ing ha
p oduc i i y e ec s domina e sec o al changes in coun ies ich in labo and capi al.
Simila indings o unemploymen - educing e ec s o ade libe aliza ion we e iden i-
ied by Felbe may e al. (2008), whe e hese e ec s we e also a ibu ed o p oduc i i y-
d i en o ces. Howe e , Helpman and I skhoki (2007) wa ned ha libe alizing ade could
inc ease o e all unemploymen . S udies such as hose by Da idson e al. (1999) and Moo e
and Ranjan (2005) p o ided mixed esul s, wi h no clea conclusion on he o e all e ec o
ade on unemploymen .
Al-Taie e al. (2023) analyzed I aq’s ade policy, which was isola ed om o he
economic s a egies due o i s oil dependence and igid p oduc ion sys em. They ound ha
I aq’s limi ed di e si ica ion exace ba ed unemploymen . Simila ly, Haze a-Tun-Nessa e al.
(2021) showed ha ade openness inc eased unemploymen in 12 less-de eloped coun ies
(LDCs) be ween 1995 and 2016. Famode e al. (2020) ound ha ade openness had only a
weak long- e m e ec on unemploymen in he Congo om 1991 o 2017, sugges ing ha
o he ac o s played a mo e signi ican ole in de e mining unemploymen .
Das and Ray (2020) explo ed whe he globaliza ion in luences employmen gene a ion
in Sou h Asian coun ies be ween 1991 and 2016. They ound no long- e m ela ionship
o mos coun ies excep Bhu an, he Maldi es, and Nepal. Thei panel analysis indica ed
ha while globaliza ion a ec s sho - e m employmen , he long- e m impac a ies ac oss
coun ies. Simila ly, a s udy by Ali e al. (2021) assessed he ela ionship be ween ade
openness, human capi al, public expendi u e, ins i u ional pe o mance, and unemploy-
men in O ganiza ion o Islamic Coope a ion (OIC) coun ies. Thei long- e m es ima es
e ealed ha ade openness has a nega i e and signi ican ela ionship wi h unemploy-
men in lowe -income OIC economies, while i co ela es posi i ely wi h unemploymen in
highe -income OIC coun ies. This highligh s he a ying e ec s o globaliza ion depending
on he coun y’s income le el.
Mos p e ious s udies ha e p ima ily ocused on examining he impac o globaliza-
ion on unemploymen using non-spa ial econome ic me hods, which o en o e look he
geog aphical con ex and spa ial dependencies. This s udy aims o add ess his gap by
inco po a ing spa ial analysis, allowing o a mo e nuanced unde s anding o how di e en
ac o s, including ade policies and labo ma ke condi ions, in luence unemploymen
ac oss a ious egions. Accoun ing o spa ial dependencies can p o ide insigh s in o
how neighbo ing coun ies o egions may in luence one ano he ’s unemploymen ends.
Using he spa ial Du bin model (SDM), he s udy conside s no only he di ec impac
o globaliza ion on unemploymen in a speci ic egion bu also how neighbo ing egions
may be in luenced (spillo e e ec s). Addi ionally, his s udy in es iga es how he le el o
g oss na ional income (GNI) pe capi a in e ac s wi h he e ec s o economic globaliza ion
on unemploymen . This pa o he analysis explo es whe he he ela ionship be ween
Economies 2025,13, 72 8 o 28
globaliza ion and unemploymen di e s depending on he economic s eng h o a egion,
as measu ed by i s GNI pe capi a. The goal is o unde s and be e how hese ac o s shape
unemploymen dynamics ac oss di e en egions and economies.
3. Me hodology
3.1. Model Speci ica ion
The da a o clus e ed uni s based on neighbo hood o ade pac s and social, poli -
ical, cul u al, o his o ical easons a e no independen and a e spa ially co ela ed. A
wide ange o spa ial panel models has been es ima ed. Acco ding o Elho s (2014), h ee
ypes o in e ac ion e ec s can be es ima ed: endogenous in e ac ion e ec s among depen-
den a iables (Y), exogenous in e ac ion e ec s among independen a iables (X), and
in e ac ion e ec s among e o e ms (ε).
The SDM (spa ial Du bin model) gene alizes he spa ial au o eg essi e (SAR) model
and implies global spa ial spillo e s. The explana o y a iables o his model include
spa ially weigh ed independen a iables. The SDM inco po a es bo h endogenous and
exogenous in e ac ion e ec s. The endogenous e ec s o his model cap u e how he alue
o he dependen a iable U o a spa ial uni may also be a ec ed by he dependen a i-
ables o o he spa ial uni s. The exogenous e ec cap u es how he alue o he dependen
a iable U o a spa ial uni may also be a ec ed by independen a iables o o he spa ial
uni s. The spa ial dependence o unemploymen in one coun y on unemploymen in
o he s and economic globaliza ion in o he coun ies is es ima ed using SDM.
The economic globaliza ion–unemploymen nexus has been e isi ed by applying
spa ial panel econome ic me hods using SDM. SDM p o ides es ima es o explana o y
a iables in a pa icula plo , s a e, and coun y as well as in neighbo ing plo s, s a es,
and coun ies (Guo & Ma chand,2019). This mus be conside ed when using he spa ial
co ela ion app oach because he ac ual space, bo de , o neighbo hood does no usually
p esen s ong co ela ions. Howe e , s ong co ela ions could exis be ween di e en
pa e ns, such as a g oup o coun ies in a ade pac , e e yday language, o his o ical
easons. Di e en app oaches can be conside ed o de e mine he weigh ed spa ial ma ix
W based on di e en causes o he co ela ions.
The SDM inco po a es bo h endogenous and exogenous in e ac ion e ec s. The SDM
includes he spa ial lags o bo h he dependen and independen a iables on he igh -hand
side o he model, hus cap u ing he p ope ies o bo h spa ial lag and e o s (Thang e al.,
2016). SDM is he mos app op ia e model i he e a e spa ially co ela ed omi ed a iables
ha co ela e wi h an explana o y a iable (LeSage & Pace,2009). The spa ial dependence
o unemploymen in a coun y on unemploymen in o he s and economic globaliza ion in
o he coun ies was es ima ed using SDM. The basic equa ion o his model is as ollows
(Belo i e al.,2017;Elho s ,2014;LeSage,1999).
∆U =ρW∆U +∆X β+W∆Z θ+µ+ϵ (1)
The dependen a iable
U
deno es he n
×
1 column ec o o he dependen a iable;
X
deno es he n
×
k ma ix o eg esso s, whe e = 1,
. . .
; T indica es ime se ies pe iods;
Z
deno es he n
×
k ma ix o eg esso s used o he in e ac ion e ec be ween spa ial weigh s
and eg esso s;
β
is he eg ession coe icien ;
ρ
is he spa ial au o eg essi e pa ame e
e lec ing he s eng h o he spa ial dependencies; and
ϵ
is he unobse ed e o e m. W is
an n
×
n ma ix, indica ing he spa ial a angemen o n uni s. Each en y
wij ϵ
W ep esen s
he spa ial weigh associa ed wi h uni s i and j, whe e i is he i h coun y and j is he ela ed
coun y. Sel -neighbo s a e excluded by con en ionally se ing he diagonal elemen s
wij
equal o ze o (Belo i e al.,2017). The a iables used in his s udy a e p esen ed in Table 1.
Economies 2025,13, 72 15 o 28
should be independen ly dis ibu ed. The p- alue o Pesa an’s (2015) es o c oss-sec ional
independence is signi ican a he 1% le el, excep o LFPTF, which is signi ican a 5%, as
shown in Table 4, indica ing ha he da a a e co ela ed ac oss panel g oups. The e o e, he
da a we e c oss-sec ionally dependen .
Table 4. Pesa an’s CD es es ima es.
Va iable CD Tes p-Value
UNEM 30.489 0.000
GDP 81.513 0.000
POPU 43.498 0.000
LFPTF 2.408 0.016
NETM 4.876 0.000
INFL 88.738 0.000
EGLOBI 68.865 0.000
GNI_EGLOBI 142.532 0.000
FDI 18.931 0.000
GNI_FDI 20.542 0.000
OPENSS 92.150 0.000
GNI_OPEN 177.533 0.000
Sou ce: Au ho s’ calcula ion.
Mo an’s I es was used o spa ial au oco ela ion in he esiduals o he OLS es ima-
ion o he unemploymen a e as a unc ion o economic globaliza ion. Mo an’s I alue
anges om
−
1 o 1, whe e
−
1 indica es pe ec dispe sion o he a iable o in e es , 0
signi ies andom dispe sion, and 1 deno es pe ec clus e ing. I he p- alue is less han
he signi icance le el (e.g.,
α
= 0.05), we can ejec he null hypo hesis ha he da a a e
andomly dispe sed.
Mo an’s I es ima es a e p esen ed in Table 5. The annual Mo an’s I es ima ion was
signi ican o he 17 yea s. The insigni ican p- alues indica e ha he es was insigni ican
and ha ou obse a ions we e independen , iden ically dis ibu ed, and consis en wi h
ou expec a ions. The signi ican p- alues indica e ha he obse a ions a e no independen
and a e spa ially posi i ely o nega i ely co ela ed. The Hausman es o SDM is based
on CPSLHT, and he neighbo hood i mly ejec s andom e ec s speci ica ions.
Table 5. Yea ly Mo an’s es ima es.
Yea Mo an’s I Chi-Squa e p-Value
1992 0.092 *** 7.200 0.007
1993 0.103 *** 35.180 0.000
1994 0.053 2.150 0.142
1995 0.135 0.010 0.931
1996 0.086 0.130 0.719
1997 0.009 *** 7.520 0.006
1998 0.078 *** 19.560 0.000
1999 0.038 *** 7.340 0.007
Economies 2025,13, 72 16 o 28
Table 5. Con .
Yea Mo an’s I Chi-Squa e p-Value
2000 −0.047 0.370 0.542
2001 −0.026 *** 7.190 0.007
2002 0.020 *** 9.490 0.002
2003 −0.048 0.020 0.882
2004 0.077 2.260 0.133
2005 0.109 1.230 0.268
2006 −0.003 ** 6.550 0.011
2007 −0.100 *** 32.330 0.000
2008 −0.012 0.000 0.988
2009 −0.081 *** 20.280 0.000
2010 0.072 *** 20.400 0.000
2011 −0.018 0.760 0.385
2012 −0.037 0.350 0.554
2013 0.067 1.570 0.210
2014 −0.075 ** 5.790 0.016
2015 −0.079 *** 11.550 0.001
2016 −0.063 *** 65.960 0.000
2017 −0.085 *** 46.960 0.000
2018 −0.017 *** 30.210 0.000
2019 −0.012 *** 11.260 0.001
Sou ce: Au ho s’ calcula ion; *** p< 0.01, ** p< 0.05.
4.1. Es ima es Based on Spa ial Weigh s—CPSLHT
The es ima es om he SDM show ha he di ec and indi ec coe icien s o GDP
and in la ion a e nega i e and signi ican in he sho and long un. The di ec e ec o
popula ion g ow h on he unemploymen a e is posi i e in bo h he sho and long e m.
The indi ec coe icien o he emale labo o ce pa icipa ion a e is nega i e and signi ican
in he sho and long un. The indi ec e ec o economic globaliza ion is nega i e and
signi ican in he sho and long un. The di ec in e ac ion e ec o GNI pe capi a and
economic globaliza ion is nega i e and s a is ically signi ican . The coe icien s o he
lagged unemploymen a es a e posi i e and signi ican (Table 6).
Table 6. SDM es ima es o ma ginal e ec s o economic globaliza ion based on he CPSLHT weigh ma ix.
Va iables Main Wx
Sho -Te m Long-Te m
Di ec Indi ec Di ec Indi ec
L.UNEM 0.316 ***
(0.014)
GDP −0.010 ***
(0.001)
−0.004 ***
(0.001)
−0.010 ***
(0.001)
−0.008 ***
(0.001)
−0.015 ***
(0.001)
−0.019 ***
(0.002)
POPU 0.360 ***
(0.093)
0.0757
(0.169)
0.361 ***
(0.089)
0.191
(0.205)
0.535 ***
(0.131)
0.479
(0.369)
LFPTF 0.006
(0.014)
−0.089 **
(0.035)
0.004
(0.013)
−0.109 **
(0.047)
0.004
(0.020)
−0.196 **
(0.086)
Economies 2025,13, 72 17 o 28
Table 6. Con .
Va iables Main Wx
Sho -Te m Long-Te m
Di ec Indi ec Di ec Indi ec
NETM −0.001
(0.001)
0.001
(0.002)
−0.001
(0.001)
0.0003
(0.003)
−0.002
(0.001)
0.000
(0.005)
INFL −0.011 **
(0.005)
−0.015 *
(0.009)
−0.011 **
(0.005)
−0.022 *
(0.011)
−0.017 **
(0.007)
−0.044 **
(0.020)
EGLOBI 0.002
(0.008)
−0.039 ***
(0.015)
0.001
(0.0075)
−0.049 ***
(0.018)
0.001
(0.011)
−0.088 ***
(0.032)
GNI_EGLOBI
−0.004 ***
(0.001)
0.003 *
(0.001)
−0.004 ***
(0.001)
0.003
(0.002)
−0.005 ***
(0.001)
0.004
(0.004)
RHO 0.221 ***
(0.029)
Adjus ed R20.212 0.212 0.212 0.212 0.212 0.212
Sou ce: Au ho s’ calcula ion; s anda d e o s in pa en heses; *** p< 0.01, ** p< 0.05, * p< 0.1.
An endogenous spa ial e ec is e iden in he spa ial lag o he dependen a iable
(
ρ
). The spa ially lagged g ow h coe icien Rho (
ρ
) indica es signi ican spillo e e ec s on
he local unemploymen a e in ela ed coun ies. Rho is posi i e and signi ican a he 1%
le el in he CPSLHT weigh ma ix. The posi i e spillo e s ac oss coun ies a e suppo ed
by he Wald es , which ejec s he null hypo hesis o ho = 0 (Table 6).
The main spa ial and ime- ixed es ima es om SDM, based on he decomposed
componen s o economic globaliza ion, a e p esen ed in Table 7. The di ec and indi ec
e ec s o GDP g ow h a e signi ican in he sho and long e m. The di ec e ec s o
popula ion g ow h a e signi ican in bo h he sho and long e m. The indi ec e ec o
emale labo o ce pa icipa ion a es is nega i e and signi ican in he sho and long e ms.
The di ec e ec o ne mig a ion is nega i e and signi ican a he 10% le el in he sho and
long e ms. The di ec e ec o in la ion is nega i e and signi ican a he 10% le el in he
sho and long e m. The indi ec e ec o ade openness is nega i e and signi ican a he
5% le el in he sho and long e m. The di ec e ec o GNI pe capi a and FDI is nega i e
and signi ican a he 10% le el in he sho and long e m. The di ec in e ac ion e ec o
GNI pe capi a and ade openness is nega i e and signi ican a 1% in he sho and long
e ms. The coe icien on he lagged unemploymen a e is posi i e and signi ican .
Table 7. SDM es ima es o ma ginal e ec s o decomposed componen s o economic globaliza ion—
FDI and ade openness based on he CPSLHT weigh ma ix.
Va iables Main Wx
Sho -Te m Long-Te m
Di ec Indi ec Di ec Indi ec
L.UNEM 0.322 ***
(0.014)
GDP −0.009 ***
(0.001)
−0.003 **
(0.001)
−0.010 ***
(0.001)
−0.006 ***
(0.001)
−0.015 ***
(0.001)
−0.016 ***
(0.003)
POPU 0.351 ***
(0.093)
0.032
(0.170)
0.351 ***
(0.090)
0.119
(0.196)
0.524 ***
(0.133)
0.360
(0.361)
LFPTF 0.005
(0.014)
−0.093 ***
(0.035)
0.004
(0.014)
−0.112 **
(0.045)
0.003
(0.020)
−0.207 **
(0.085)
NETM −0.001 *
(0.001)
0.000
(0.002)
−0.001 *
(0.001)
−0.000
(0.002)
−0.002 *
(0.001)
−0.001
(0.004)
INFL −0.008 *
(0.004)
−0.008
(0.009)
−0.008 *
(0.005)
−0.013
(0.011)
−0.013 *
(0.007)
−0.027
(0.021)
Economies 2025,13, 72 18 o 28
Table 7. Con .
Va iables Main Wx
Sho -Te m Long-Te m
Di ec Indi ec Di ec Indi ec
FDI −0.002
(0.010)
−0.013
(0.028)
−0.003
(0.010)
−0.013
(0.037)
−0.004
(0.015)
−0.026
(0.069)
OPENSS −0.0001
(0.005)
−0.024 **
(0.011)
0.000
(0.005)
−0.032 **
(0.0142)
−0.001
(0.008)
−0.058 **
(0.026)
GNI_FDI −0.003 *
(0.001)
0.000
(0.004)
−0.003 *
(0.001)
−0.001
(0.005)
−0.004 *
(0.002)
−0.003
(0.009)
GNI_OPEN −0.002 **
(0.001)
0.001
(0.001)
−0.003 ***
(0.001)
0.002
(0.002)
−0.004 ***
(0.001)
0.002
(0.004)
RHO 0.207 ***
(0.029)
Adjus ed R20.218 0.218 0.218 0.218 0.218 0.218
Sou ce: Au ho s’ calcula ion; s anda d e o s in pa en heses; *** p< 0.01, ** p< 0.05, * p< 0.1.
The e is an obse able endogenous spa ial e ec in he spa ial lag o he dependen
a iable (
ρ
), e lec ing he ex en o spillo e s om ela ed coun ies. The spa ially lagged
unemploymen coe icien Rho (
ρ
), associa ed wi h spa ial and ime- ixed e ec s on he
unemploymen a e, is posi i e and signi ican a he 1% le el when using he weigh ma ix
based on CPSLHT. This inding indica es a no able spillo e e ec o he unemploymen
a es om ela ed coun ies on he local unemploymen a e. The Wald es , which ejec s
he null hypo hesis o ho = 0, u he suppo s he p esence o posi i e spillo e s among
he coun ies analyzed in his s udy (Table 7).
4.2. Es ima es Based on Spa ial Weigh s—Neighbo hood
The SDM’s main spa ial and ime- ixed es ima es based on neighbo hood and he
composi e index o economic globaliza ion a e epo ed in Table 8. The coe icien on he
lagged unemploymen a e is posi i e and signi ican . The di ec and indi ec coe icien s
o GDP a e nega i e and signi ican in he sho and long e m, espec i ely. The di ec
coe icien o popula ion g ow h is posi i e in he sho and long e m. The di ec coe icien
o emale labo o ce pa icipa ion a es is nega i e bu insigni ican . The di ec coe icien
o ne mig a ion is nega i e in bo h he sho and long e m. The di ec and indi ec
coe icien s o in la ion a e nega i e and signi ican in he sho and long e ms. The
coe icien o economic globaliza ion is nega i e bu no signi ican . The di ec coe icien
o he in e ac ion e ec o GNI pe capi a and economic globaliza ion is nega i e and
signi ican a he 5% le el. An endogenous spa ial e ec is e iden in he spa ial lag o
he dependen a iable (
ρ
). Howe e , he Wald es does no p o ide con incing suppo
o posi i e spillo e s ac oss coun ies as i ails o ejec he null hypo hesis o ho = 0
(Table 8).
The SDM’s main spa ial and ime- ixed es ima es based on neighbo hood and he
mos impo an decomposed componen s o economic globaliza ion a e epo ed in Table 9.
The di ec and indi ec coe icien s o GDP and in la ion a e nega i e and signi ican in he
sho and long e m, espec i ely. The di ec coe icien s o popula ion g ow h a e posi i e
in he sho and long e m. The coe icien s o he emale wo k o ce a e no signi ican . The
di ec coe icien o ne mig a ion is nega i e and signi ican a he 10% le el in he sho
and long e ms. The coe icien o FDI is nega i e bu no signi ican . The indi ec e ec o
ade openness is signi ican in he sho and long e m. The di ec coe icien o in e ac ion
o GNI pe capi a and FDI is nega i e and signi ican a he 10% le el in he sho and long
e m. The di ec coe icien o in e ac ion be ween GNI pe capi a and ade openness is
nega i e and signi ican a he 1% le el in he sho and long e m. Howe e , he indi ec
Economies 2025,13, 72 19 o 28
coe icien o he in e ac ion e ec o GNI pe capi a and ade openness is posi i e and
signi ican in he sho and long e m. An endogenous spa ial e ec is obse ed in he
spa ial lag o he dependen a iable (
ρ
). Howe e , Rho (
ρ
) o he spa ial and ime- ixed
e ec s on he unemploymen a e is nonsigni ican , sugges ing ha he spillo e e ec om
ela ed coun ies on he local coun y’s unemploymen a e is nonsigni ican (Table 9).
Table 8. SDM es ima es o ma ginal e ec s o economic globaliza ion based on he neighbo hood
weigh ma ix.
Va iables Main Wx
Sho -Te m Long-Te m
Di ec Indi ec Di ec Indi ec
L.UNEM 0.345 ***
(0.013)
GDP −0.011 ***
(0.001)
−0.002 ***
(0.001)
−0.011 ***
(0.001)
−0.002 ***
(0.000)
−0.017 ***
(0.001)
−0.003 ***
(0.001)
POPU 0.419 ***
(0.091)
−0.139
(0.126)
0.417 ***
(0.088)
−0.138
(0.122)
0.638 ***
(0.136)
−0.218
(0.184)
LFPTF −0.001
(0.014)
0.015
(0.023)
−0.001
(0.014)
0.016
(0.024)
−0.001
(0.021)
0.025
(0.037)
NETM −0.001 *
(0.001)
−0.001
(0.001)
−0.001 *
(0.001)
−0.001
(0.001)
−0.002 *
(0.001)
−0.001
(0.001)
INFL −0.014 ***
(0.004)
−0.026 ***
(0.006)
−0.014 ***
(0.004)
−0.025 ***
(0.006)
−0.021 ***
(0.007)
−0.038 ***
(0.010)
EGLOBI −0.000
(0.007)
−0.014
(0.011)
−0.000
(0.007)
−0.014
(0.011)
−0.001
(0.011)
−0.022
(0.017)
GNI_EGLOBI
−0.003 ***
(0.001)
0.002
(0.001)
−0.003 ***
(0.001)
0.002
(0.001)
−0.005 ***
(0.001)
0.003
(0.002)
RHO 0.007
(0.018)
Adjus ed R20.184 0.184 0.184 0.184 0.184 0.184
Sou ce: Au ho s’ calcula ion; s anda d e o s in pa en heses; *** p< 0.01, * p< 0.1.
Table 9. SDM es ima es o ma ginal e ec s o decomposed componen s o economic globaliza ion—
FDI and ade openness based on he neighbo hood weigh ma ix.
Va iables Main Wx Sho -Te m Long-Te m
Di ec Indi ec Di ec Indi ec
L.UNEM 0.352 ***
(0.013)
GDP −0.011 ***
(0.001)
−0.002 **
(0.001)
−0.011 ***
(0.001)
−0.002 **
(0.000)
−0.017 ***
(0.001)
−0.002 **
(0.001)
POPU 0.392 ***
(0.091)
−0.167
(0.126)
0.390 ***
(0.088)
−0.172
(0.120)
0.602 ***
(0.137)
−0.265
(0.185)
LFPTF 0.001
(0.014)
0.016
(0.023)
0.001
(0.014)
0.016
(0.0237)
0.001
(0.021)
0.025
(0.036)
NETM −0.002 *
(0.001)
−0.001
(0.001)
−0.001 *
(0.001)
−0.001
(0.001)
−0.002 *
(0.001)
−0.001
(0.001)
INFL −0.010 **
(0.004)
−0.021 ***
(0.006)
−0.010 **
(0.004)
−0.020 ***
(0.007)
−0.016 **
(0.004)
−0.031 ***
(0.0108)
RHO 0.001
(0.018)
Economies 2025,13, 72 20 o 28
Table 9. Con .
Va iables Main Wx Sho -Te m Long-Te m
Di ec Indi ec Di ec Indi ec
FDI −0.004
(0.010)
−0.007
(0.018)
−0.004
(0.010)
−0.00
(0.018)
−0.006
(0.016)
−0.008
(0.023)
OPENSS −0.001
(0.005)
−0.027 ***
(0.008)
−0.000
(0.005)
−0.027 ***
(0.008)
−0.000
(0.00
−0.042 ***
(0.013)
GNI_FDI −0.003 *
(0.001)
−0.000
(0.002)
−0.003 *
(0.001)
−0.001
(0.002)
−0.004 *
(0.002)
−0.001
(0.004)
GNI_OPEN −0.004 ***
(0.001)
0.003 *
(0.001)
−0.004 ***
(0.001)
0.003 *
(0.001)
−0.006 ***
(0.002)
0.004 *
(0.002)
Adjus ed R20.194 0.194 0.194 0.194 0.194 0.194
Sou ce: Au ho s’ calcula ion; s anda d e o s in pa en heses; *** p< 0.01, ** p< 0.05, * p< 0.1.
4.3. Bes Spa ial Model
4.3.1. Tes ing o Bes Model Be ween SDM and SAR
We i ed SDM bu needed o asce ain whe he i was he bes model o he da a.
This p ocedu e has been desc ibed by LeSage and Pace (2009). The chi-squa e (7) is 15.75,
wi h a p- alue less han 5%, so SDM based on CPSLHT and economic globaliza ion is he
bes model compa ed wi h he SAR model. The chi-squa e (9) is 27.32, wi h a p- alue less
han 1%, so SDM based on CPSLHT is he bes model compa ed o he SAR model wi h
decomposed componen s—FDI and ade openness.
The bes model be ween SDM and SAR based on neighbo hood and economic glob-
aliza ion was es ed. The chi-squa e (7) is 12.38, wi h a p- alue g ea e han 5%, so he
SDM based on he neighbo hood and economic globaliza ion is no signi ican and is no
he bes model. Simila ly, he SDM based on neighbo hood and decomposed economic
globaliza ion wi h FDI and ade openness is no signi ican ; he chi-squa e (9) is 11.77,
wi h a p- alue g ea e han 10%, and is no be e han he SAR model.
4.3.2. Tes ing o Bes Model Be ween SDM and SEM
Tes ing o he bes model be ween SDM and SEM based on CPSLHT and economic
globaliza ion was conduc ed. The chi-squa e (7) is 28.17, wi h a p- alue less han 1%, so
he SDM based on CPSLHT and economic globaliza ion is he bes model compa ed o he
SEM. The chi-squa e (9) is 43.06, wi h a p- alue less han 1%, so he SDM based on he
CPSLHT and decomposed economic globaliza ion wi h FDI and ade openness is he bes
model compa ed o he SEM.
The chi-squa e (8) is 11.34, wi h a p- alue g ea e han 5%, so he SDM based on he
neighbo hood and economic globaliza ion is no he bes model compa ed o he SEM.
The chi-squa e (9) is 11.18, wi h a p- alue g ea e han 5%, so he SDM based on he
neighbo hood and decomposed economic globaliza ion wi h FDI and ade openness is no
he bes model compa ed o he SEM.
4.3.3. Tes ing o Bes Model Be ween SDM and SAC
In o ma ion c i e ia, such as he Akaike In o ma ion C i e ia (AIC) and Bayesian
In o ma ion C i e ia (BIC), we e used o es he mos app op ia e model be ween SDM
and SAC.
AIC and BIC, based on CPSLHT and neighbo hood, show ha SDM is he bes model
(Table 10).
Economies 2025,13, 72 21 o 28
Table 10. In o ma ion c i e ia o SDM and SAC based on spa ial and ime ixed e ec s.
C i e ia SDM SAC
CPSLHT
Neighbo hood
CPSLHT
Neighbo hood
AIC −1671.77 −1525.78 −1349.93 −1209.73
BIC −1557.32 −1411.33 −1285.98 −1145.79
Sou ce: Au ho s’ calcula ion.
The Le in–Lin–Chu (LLC) uni oo es o panel da a examines he null hypo hesis
ha each panel (c oss-sec ion) has a uni oo , meaning he da a a e non-s a iona y, agains
he al e na i e hypo hesis ha all panels a e s a iona y. A p- alue smalle han 0.05 leads
o ejec ing he null hypo hesis, indica ing ha he a iable is s a iona y (no uni oo ) a e
di e encing. In his analysis, all di e enced a iables we e con i med o be s a iona y.
Mul icollinea i y be ween he a iables was no obse ed. These es s a e essen ial o
p o ide obus ness o he s udy.
5. Discussion
This s udy examines he e ec o he in e ac ion be ween economic globaliza ion
and GNI pe capi a on unemploymen a es in 158 coun ies om 1991 o 2019 using he
spa ial Du bin model (SDM). The es ima es based on he CPSLHT weigh ma ix p o ided
be e esul s.
The es ima es om SDM using economic globaliza ion and i s decomposed com-
ponen s showed ha he di ec and indi ec e ec s o GDP on unemploymen a es a e
nega i e and signi ican in he sho and long un. The nega i e and signi ican e ec s
o GDP on unemploymen a es, bo h di ec ly and indi ec ly, sugges ha policymake s
should p io i ize s a egies ha p omo e sus ained economic g ow h o educe unemploy-
men . This can be achie ed h ough policies ha suppo in es men , inno a ion, and
global economic in eg a ion. Gi en he spillo e e ec s obse ed in he spa ial Du bin
model, coo dina ing egional and in e na ional policies is c ucial o add essing po en ial
dispa i ies. Addi ionally, while globaliza ion can help lowe unemploymen , i is impo an
o implemen policies ha p o ec ulne able sec o s and ensu e ha he bene i s o g ow h
a e widely dis ibu ed ac oss all egions.
The di ec e ec o popula ion g ow h on he unemploymen a e was posi i e and sig-
ni ican in bo h he sho and long e ms in models ha used bo h o e all and decomposed
economic globaliza ion. The posi i e and signi ican di ec e ec o popula ion g ow h on
unemploymen in bo h he sho and long e m sugges s ha policymake s mus ocus on
c ea ing a mo e lexible labo ma ke , in es ing in sec o s ha gene a e jobs, and enhancing
educa ion and skill de elopmen o equip he g owing labo o ce. Addi ionally, imp o ing
in as uc u e in u ban a eas and ensu ing balanced egional de elopmen a e c ucial o
abso b he ising labo supply. Popula ion con ol measu es and immig a ion policies may
also be needed o manage he g ow h a e, ensu ing ha economic oppo uni ies keep pace
wi h he inc easing popula ion and p e en high unemploymen .
The indi ec coe icien o he emale labo o ce pa icipa ion a e was nega i e and
signi ican in bo h he sho and long un in models wi h bo h o e all and decomposed
economic globaliza ion. The nega i e and signi ican indi ec e ec o emale labo o ce
pa icipa ion (FLFP) on unemploymen sugges s ha inc easing women’s wo k o ce pa -
icipa ion can ha e b oad posi i e spillo e e ec s on educing unemploymen egionally
and o e ime. Policymake s should p io i ize ini ia i es ha suppo emale employmen ,
such as imp o ing access o a o dable childca e, p omo ing lexible wo k a angemen s,
and add essing gende dispa i ies in wages and job oppo uni ies. Addi ionally, os e ing
women’s pa icipa ion in globally in eg a ed sec o s h ough educa ion and skills aining
Economies 2025,13, 72 22 o 28
will u he enhance hese bene i s and con ibu e o na ional and egional unemploy-
men educ ion.
In he economic globaliza ion model, he di ec e ec o ne mig a ion on unemploy-
men was nega i e bu insigni ican . Howe e , in he model wi h decomposed economic
globaliza ion, he di ec e ec o ne mig a ion was nega i e and signi ican in bo h he
sho and long e m. The indings sugges ha ne mig a ion may no signi ican ly impac
unemploymen in a b oad economic globaliza ion con ex when speci ic aspec s o global-
iza ion a e conside ed (e.g., ade openness o o eign di ec in es men ); ne mig a ion has
a mo e p onounced and bene icial e ec , educing unemploymen . This implies ha policy-
make s should ocus on mig a ion policies ha align wi h he key aspec s o globaliza ion,
such as a ac ing skilled mig an s o globally in eg a ed o expo -o ien ed indus ies,
which can con ibu e o lowe ing unemploymen . Addi ionally, os e ing condi ions ha
enhance he posi i e e ec s o mig a ion on labo ma ke s, such as imp o ing in eg a ion
and labo ma ke access o mig an s, can u he ampli y hese bene i s.
The di ec and indi ec coe icien s o in la ion we e nega i e and signi ican in he
sho and long un in he economic globaliza ion model. In he model wi h decomposed
economic globaliza ion, he di ec e ec o in la ion emained nega i e and signi ican in
bo h he sho and long e m. The nega i e and signi ican di ec and indi ec e ec s o
in la ion on unemploymen in bo h he sho and long un, pa icula ly in he con ex o
economic globaliza ion, sugges ha mode a e in la ion can help educe unemploymen
by s imula ing demand and p oduc ion. Policymake s should aim o main ain in la ion
a manageable le els h ough sound mone a y policy while capi alizing on he posi i e
in e ac ions be ween in la ion and speci ic aspec s o globaliza ion, such as ade open-
ness and capi al mobili y, o enhance employmen oppo uni ies. Howe e , hey should
emain cau ious abou excessi ely high in la ion, which could des abilize he economy and
unde mine employmen bene i s.
In he economic globaliza ion model, he indi ec e ec o economic globaliza ion on
he unemploymen a e was nega i e and signi ican in bo h he sho and he long un. In
he model wi h decomposed economic globaliza ion, he sho - and long- e m coe icien s
o FDI we e nega i e bu no signi ican , while he indi ec e ec o ade openness was
nega i e and signi ican a he 5% le el in bo h he sho and long e m. The nega i e
and signi ican indi ec e ec o ade openness on unemploymen sugges s ha policies
p omo ing ade openness can play a c ucial ole in educing unemploymen in bo h he
sho and long e m. Policymake s should ocus on educing ade ba ie s, os e ing in e -
na ional ade ag eemen s, and s eng hening global supply chains o maximize he posi i e
spillo e e ec s o ade on employmen . Al hough he impac o FDI on unemploymen
was nonsigni ican , e o s o a ac FDI o sec o s wi h highe job c ea ion po en ial could
complemen ade policies and con ibu e o long- e m employmen g ow h. This s udy
aligns wi h Pal and Villan henkoda h’s (2024) indings ha economic globaliza ion os e s
job c ea ion in high- and middle-income coun ies, esul ing in a long- e m dec ease in
unemploymen .
Rod ik (2012) ad oca ed o “sma globaliza ion,” emphasizing he balance be ween
go e nmen egula ion and ma ke eedom. He wa ned ha excessi e go e nmen con-
ol leads o p o ec ionism, whe eas unchecked ma ke s cause ins abili y and inequali y.
Rod ik called o a managed o m o globaliza ion, whe e go e nmen s ensu e ha global
in eg a ion bene i s socie y wi hou c ea ing economic ola ili y. Joseph E. S igli z’s (2003)
Globaliza ion and I s Discon en s c i iques he nega i e e ec s o globaliza ion, highligh ing
how ins i u ions such as he IMF and Wo ld Bank o en ha m poo e na ions. He a gued
ha globaliza ion inc eases inequali y and ins abili y, bene i ing co po a ions mo e han
people, and called o e o ms o make globaliza ion mo e inclusi e. Globaliza ion and
Economies 2025,13, 72 23 o 28
G ow h in he Twen ie h Cen u y by Nicholas C a s (2000) examines how globaliza ion
in luenced economic g ow h h oughou he 1900s. C a s highligh ed ha globaliza ion
d o e g ow h, bu i s bene i s we e une en, wi h some coun ies ad ancing while o he s
ell behind. He s essed he need o unde s and he complex ela ionship be ween glob-
aliza ion and g ow h o c ea e e ec i e policies. Globaliza ion and I s Impac on Economic
De elopmen by G zego z W. Kołodko (2006) explo es how globaliza ion can d i e economic
p og ess, pa icula ly o de eloping na ions, by imp o ing access o ma ke s, echnology,
and capi al. Howe e , Kolodko also wa ned ha globaliza ion can exace ba e inequali y
and ins abili y i no managed well. He ad oca ed o policies ha ensu e he bene i s o
globaliza ion a e mo e widely sha ed and con ibu e o sus ainable de elopmen .
The di ec in e ac ion e ec o GNI pe capi a and economic globaliza ion on he
unemploymen a e was nega i e and s a is ically signi ican in he model wi h economic
globaliza ion. In he model wi h decomposed economic globaliza ion, he di ec in e ac-
ion e ec o GNI pe capi a and FDI was nega i e and signi ican in bo h he sho and
long e ms. In con as , he in e ac ion e ec o GNI pe capi a and ade openness was
nega i e and signi ican in bo h ime ames. The nega i e and signi ican in e ac ion
e ec be ween GNI pe capi a and economic globaliza ion, pa icula ly h ough ade
openness and FDI, sugges s ha as coun ies g ow weal hie , he bene i s o globaliza ion
in educing unemploymen a e enhanced. Policymake s should p io i ize s a egies ha
simul aneously boos domes ic income le els, such as p oduc i i y imp o emen s and
in es men in educa ion, while ac i ely p omo ing ade openness and a ac ing o eign
di ec in es men . This combined app oach can maximize he employmen - educing e ec s
o globaliza ion, ensu ing ha highe -income na ions le e age hei economic s eng h o
bene i om global in eg a ion and educe unemploymen mo e e ec i ely.
The coe icien s o lagged unemploymen a es on unemploymen a es we e posi-
i e and signi ican in bo h he models wi h economic globaliza ion and he model wi h
decomposed economic globaliza ion. The posi i e and signi ican impac o lagged unem-
ploymen a es on cu en unemploymen sugges s ha unemploymen ends o pe sis
o e ime, making i mo e di icul o educe once i inc eases. Policymake s should ocus
on ea ly in e en ion and sus ained e o s o add ess unemploymen , including job c e-
a ion ini ia i es, labo ma ke e o ms, and e aining p og ams ha equip wo ke s wi h
new skills. In he con ex o economic globaliza ion, enhancing ade compe i i eness and
a ac ing in es men can u he aid in educing unemploymen pe sis ence. Policymake s
can p e en sho - e m unemploymen om becoming a long- e m s uc u al issue by
adop ing swi and p oac i e measu es.
An endogenous spa ial e ec was e iden in he spa ial lag o he dependen a iable
(
ρ
), whe e he spa ially lagged unemploymen coe icien (Rho,
ρ
) indica es signi ican
spillo e e ec s on local unemploymen a es om neighbo ing coun ies. This was ob-
se ed in bo h models wi h economic globaliza ion and decomposed economic globaliza-
ion using he CPSLHT weigh ma ix. The signi ican spillo e e ec s o unemploymen
om neighbo ing coun ies, as indica ed by he spa ially lagged unemploymen coe icien
(Rho,
ρ
), sugges ha unemploymen is a domes ic issue and is in luenced by egional
economic condi ions. This unde sco es he need o egional coope a ion and policy coo -
dina ion o add ess unemploymen . Policymake s should collabo a e wi h neighbo ing
coun ies on ha monized labo ma ke policies, ade ag eemen s, and economic s a e-
gies o e ec i ely manage unemploymen . Pa icipa ion in egional economic unions o
o ganiza ions can help mi iga e c oss-bo de spillo e e ec s, ensu ing ha unemploy-
men educ ion s a egies a e mo e comp ehensi e and egionally in eg a ed. Managing
popula ion g ow h, s imula ing GDP g ow h, allowing mode a e in la ion, inc easing e-
male pa icipa ion in he wo k o ce, and implemen ing well-s uc u ed mig a ion policies
Economies 2025,13, 72 24 o 28
a e c ucial o educing unemploymen a es. These s a egies wo k oge he o c ea e a
balanced economic en i onmen ha suppo s job c ea ion, ensu es wo k o ce di e si y,
add esses demog aphic challenges, and p omo es long- e m employmen .
Theo e ically, economic globaliza ion wi h he in e ac ion o GNI pe capi a, d i en by
compa a i e ad an age, ac o p opo ions, economies o scale, and p oduc di e en ia ion,
has spu ed g ow h in weal hy na ions. These p inciples enable coun ies o specialize
in a eas whe e hey a e mos e icien , leading o inc eased p oduc i i y and economic
expansion. Rega ding immig a ion, esea ch indica es ha allowing labo mobili y can
signi ican ly educe unemploymen . Clemens and P i che (2016) a gued ha pe mi ing
people o mo e om low-p oduc i i y places o high-p oduc i i y places is one o he mos
e icien ools o educing po e y and unemploymen . Thei s udy a gued ha while
immig a ion can o e bene i s in illing labo sho ages and suppo ing economic g ow h,
es ic ions may lead o igh e labo ma ke s in speci ic indus ies o egions, po en ially
d i ing unemploymen .
The p ac ical implica ions o his s udy a e as ollows: Rich coun ies wi h high
economic g ow h and s ong economic globaliza ion ha e he unique ad an age o educing
global unemploymen h ough immig a ion. As hese economies expand, hey c ea e a
g ea e demand o labo , which immig an s can help mee by illing gaps in a ious sec o s,
including echnology, manu ac u ing, and se ices. Addi ionally, immig an s o en possess
aluable skills ha boos inno a ion and p oduc i i y, con ibu ing o u he economic
g ow h. Globaliza ion enables hese coun ies o in eg a e in o global ma ke s, a ac
skilled wo ke s wo ldwide, and add ess labo sho ages. Immig a ion helps o main ain
a dynamic wo k o ce, which is c ucial o sus aining social se ices, suppo ing aging
popula ions, and educing unemploymen a es.
By con as , poo e coun ies wi h low economic g ow h, limi ed globaliza ion, and
high popula ion g ow h ace signi ican challenges. Thei economies o en canno c ea e
enough jobs o abso b he expanding labo o ce, leading o highe unemploymen a es and
unde employmen . These coun ies lack he in as uc u e, in es men , and indus ializa-
ion o suppo la ge-scale job c ea ion. While immig a ion is less common in hese egions,
many indi iduals om poo e coun ies seek be e oppo uni ies ab oad, con ibu ing o a
“b ain d ain” ha u he s un s economic de elopmen . Wi hou su icien esou ces o
oppo uni ies, hese na ions s uggle o p o ide sus ainable employmen o hei g owing
popula ions, exace ba ing economic inequali y.
6. Conclusions
This s udy analyzes he in e ac ion be ween economic globaliza ion and GNI pe
capi a on unemploymen a es in 158 coun ies (1991–2019) using he spa ial Du bin model
(SDM). The indings show ha GDP has signi ican nega i e e ec s on unemploymen in
bo h he sho and long e ms, highligh ing he impo ance o economic g ow h in educing
unemploymen . Popula ion g ow h inc eases unemploymen , emphasizing he need o
lexible labo ma ke s, job c ea ion, and in es men in educa ion. Inc eased emale labo
o ce pa icipa ion and mig a ion, pa icula ly in he con ex o ade openness and FDI,
helps lowe unemploymen . Fo smoo h immig a ion, i is essen ial o add ess labo ma ke
igidi ies such as s ic egula ions, lack o lexibili y, and skill misma ches. By emo ing
hese ba ie s, immig an s can in eg a e mo e easily in o he wo k o ce, con ibu ing o
economic g ow h. Policies should ocus on imp o ing labo ma ke lexibili y, ecognizing
o eign quali ica ions, and ensu ing job oppo uni ies align wi h mig an s’ skills, ul i-
ma ely os e ing a mo e inclusi e and e icien economy. Mode a e in la ion also educes
unemploymen by s imula ing demand. T ade openness and FDI play c ucial oles in un-
employmen educ ion, wi h weal hie coun ies bene i ing mo e om globaliza ion. This
