How Investing Abroad Can Create Jobs at Home
Larger outward FDI boosts home-country jobs, especially through greenfield investments.
The employment effects of foreign direct investment (FDI) remain the subject of ongoing debate. In a new study published in the Journal of International Business Policy (JIBP), Vera Kunczer and her co-author Guus Hendriks provide new evidence on when outward foreign direct investment (OFDI) is associated with job creation in firms' home countries. The study shows that larger OFDI investments, relative to firm size, are more likely to create employment at home. This positive effect is particularly pronounced for greenfield investments, state-owned firms, and firms with a strong home-region focus. The findings suggest that employment policies should consider investment size relative to the investing firm's organizational capacity, rather than focusing solely on the absolute value of foreign investments. Overall, the study contributes to a more nuanced understanding of how outward FDI shapes domestic employment and offers insights for both policymakers and researchers.
The article is available as open access and can be downloaded here: https://lnkd.in/euTjj9cE
