The indirect employment effects of FDI are often as large as, if not l

QUESTION

The indirect employment effects of FDI are often as large as, if not larger than, the direct effects.

Indicate whether the statement is true or false.

ANSWER

TRUE
The effects of FDI on employment are both direct and indirect. Direct effects arise when a foreign MNE employs a number of host-country citizens. Indirect effects arise when jobs are created in local suppliers as a result of the investment and when jobs are created because of increased local spending by employees of the MNE. The indirect employment effects are often as large as, if not larger than, the direct effects.