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Journal cover: European Business Review

European Business Review

ISSN: 0955-534X

Online from: 1989

Subject Area: International Business

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Foreign direct investment and employment in host regions

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Title:Foreign direct investment and employment in host regions
Author(s):Frank McDonald, (Frank McDonald is Head of the International Business Unit at Manchester Metropolitan University, Manchester, UK.), Heinz J. Tüselmann, (Heinz J. Tüselmann is a Senior Lecturer in International Business at Manchester Metropolitan University, Manchester, UK.), Arne Heise, (Arne Heise is Professor of Economics, Economics University, Vienna, Austria.)
Citation:Frank McDonald, Heinz J. Tüselmann, Arne Heise, (2002) "Foreign direct investment and employment in host regions", European Business Review, Vol. 14 Iss: 1, pp.40 - 55
Keywords:Employment, European Union, Foreign investment, Multinationals
Article type:General review
DOI:10.1108/09555340210414232 (Permanent URL)
Publisher:MCB UP Ltd
Abstract:Investigates the role of direct foreign investment (DFI) in promoting employment in host regions in the European Union (EU). A theoretical framework is developed which suggests that the initial impact of DFI on employment is likely to be small and mainly linked to the creation of low skilled jobs with the loss of employment in host economies due to the displacement of domestic output by increased exports from the parent companies of subsidiaries. However, in the longer term, DFI flows should diversify the operations of subsidiaries thereby inducing a change in the pattern of jobs in host regions. The framework is assessed using evidence from a survey of German subsidiaries in north-west England. Concludes with some policy implications and a future research agenda to expand and develop knowledge in this area.

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