Abstract
Abstract This article provides an empirical assessment of a German ‘job export’ through foreign direct investment (FDI). To do this it highlights the rather problematic statistical registration of FDI. A theoretical framework is given, whereafter home country employment effects are derived from different motivations for FDI. While ‘cost oriented’ FDI are substitutive in nature and have a negative effect on home country employment, ‘market oriented’ FDI are supposed to strengthen the export basis, hence home production and employment. Statistically the structure of German FDI by industry and host regions indicates a predominance of ‘market orientation’. Exploring the motivation for German FDI by an error correction model ‘market orientation’ and ‘cost orientation’ are pervasive but with some differences in industries. In a cross-sectional analysis of FDI and employment in Germany FDI-intensive industries show a better employment performance than less FDI-intensive industries. All in all, the empirical basis for a German ‘job export’ is weak. German FDI seem to have a rather positive net employment effect. Finally, policy conclusions are drawn.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
