IMPACT OF FDI AND TRADE OPENNESS ON FEMALE LABOR FORCE PARTICIPATION IN SAUDI ARABIA

Povzetek

This study examines the impact of foreign direct investment (FDI) and trade openness on female labor force participation (FLFP) in Saudi Arabia from 1990 to 2024. Using the U-shaped theory of female labor supply and globalization frameworks, we apply an autoregressive distributed lag (ARDL) model to capture long- and short-run dynamics while accounting for domestic factors and structural reforms under Vision 2030. Results show that trade openness has a significant negative long-run effect on FLFP, while FDI exerts a positive and significant influence. In the short run, both FDI and trade openness significantly positively affect FLFP. However, reform-related interactions reveal important shifts: trade openness became more favorable to women’s labor participation post-2016, whereas FDI effects turned negative. These findings highlight the nuanced role of globalization in shaping women’s employment outcomes in Saudi Arabia and provide policy insights for sustaining progress under Vision 2030.