Globalization and Technological Innovation: Which Impact on the Rise of Unemployment?

Abstract

This paper explores the asymmetric nexus between globalization, technological innovation and unemployment within non-linear Autoregressive Distributed Lag (NARDL) framework, Granger causality approach and forecast error variance decomposition technique, covering the period from 2000 to 2018, using quarterly data in Nigeria. To avoid variable omission bias, the study incorporated control variables. The findings showed that both the positive and negative shock of our variables of study indicate varying signs and magnitudes and there is a mixed presence of asymmetries among the nexus, as indicated in the variables for both short and long runs. The results implies that trade globalization, financial globalization and technological innovation biased process innovation contributed to the persistent increase in unemployment rate except technological innovation biased product innovation, which supported the unemployment reduction in Nigeria. These findings were not consistent with existing theories. The results based on the model and empirical data suggest that the authority needs to initiate socially suitable and economic schemes and strategies by ensuring effective and efficient connectivity between globalization and technology via integrating science, technology, research and development. Also, creating an enabling environment that supports and promotes sound and credible government institutions and education including adequate mechanism to ensure optimum utilization of scare resources and avoidance of embezzlement of these limited resources by corrupt officials.