Why is it said that not all the new jobs created by fdi represent net additions in employment? because of the uncertainty of the overall economic environment because jobs created by an investment may be offset by the jobs lost in domestic companies because the unemployment rate more or less remains constant over the short-term because most of the job creation is indirect in nature?

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Business

Lawrence Hood

5 May, 13:25

Why is it said that not all the new jobs created by fdi represent net additions in employment? because of the uncertainty of the overall economic environment because jobs created by an investment may be offset by the jobs lost in domestic companies because the unemployment rate more or less remains constant over the short-term because most of the job creation is indirect in nature?

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Answers (1)

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Makai Hull · Answer 1

The answer is because jobs created by an investment may be offset by the jobs lost in domestic companies.

Explanation:

FDI refers to foreign direct investment, which is defined as a type of controlling ownership by a foreign investor in a business located in a different country. It could come in several forms, such as establishing additional business entities in a different company, which originated from a business owned by the foreigner in her or his country of origin - known as organic FDI. Inorganic FDI would be through buying an existing local company.