In many industrialized economies, there is growing concern about the relocation of economic activities. This paper analyzes whether this concern in justified. The authors show that the theory predicts ambiguous effects of relocation on the country of origin. Therefore, whether such effects are positive or negative is an empirical question. A survey of empirical works shows that no convincing evidence that outward FDI is harmful.
Does relocation of economic activities hurt labour in the home country?
Fumagalli, Chiara;Motta, Massimo
2001
Abstract
In many industrialized economies, there is growing concern about the relocation of economic activities. This paper analyzes whether this concern in justified. The authors show that the theory predicts ambiguous effects of relocation on the country of origin. Therefore, whether such effects are positive or negative is an empirical question. A survey of empirical works shows that no convincing evidence that outward FDI is harmful.
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