ABSTRACT
The significance of direct investments for exports and employment has been of central interest in studies carried out in other countries. The effects of foreign investments on exports and on employment are usually linked, since if a direct investment results in the manufacture of goods abroad rather than in the home country, this is assumed to create parallel effects, both in the home country's exports and on its employment figures. A failure to export does not necessarily involve increased unemployment in the home country if there is a shortage of the labour that would have been required for the production of such exports. We return to this question in the next chapter which discusses employment effects.
