Which of the following statements is most likely to be true regarding the effects of FDI on employment?
A)FDI does not result in job creation.
B)FDI has only indirect effects on employment in the host country.
C)The indirect employment effects of FDI are always smaller than the direct effects.
D)When FDI takes the form of an acquisition of an established enterprise in the host economy as opposed to a greenfield investment,the immediate effect is always an increase in the employment.
E)A beneficial employment effect claimed for FDI is that it brings jobs to a host country that would otherwise not be created there.

Question

Quizplus · Accepted Answer

Many economists argue that FDI can have a positive effect on employment in the host country, particularly when it brings jobs that would not have been created otherwise. This can happen when foreign investors bring new technologies, management practices or export opportunities that stimulate local industries, leading to job creation. However, the magnitude and distribution of the employment effects of FDI may vary depending on the sector, the location, and the skill requirements of the jobs. Some studies suggest that FDI can also have negative effects on employment, such as by displacing domestic firms or by creating low-paying jobs with poor working conditions. Overall, the effect of FDI on employment is likely to be complex and context-specific.

Which of the Following Statements Is Most Likely to Be