Can more FDI solve the problem of unemployment in the EU? A short note

Abstract

This letter, using regression analysis, attempts to quantify the relationship between foreign direct invetment (FDI) and jobs in the European Union. A sample of 401 Japanese firms in four EU member states has been chosen. It is shown that despite the clear enthusiasm of governments in these countries to attract FDI, its impact on job creation is not substantial, and hence, as a policy to reduce unemployment in the EU, this option may have to be seriously re-examined.