Standort Deutschland: German Direct Foreign Investment - Exodus of German industry and export of jobs?

Against the background of the hotly debated issue of Germany's attractivene ss as a business location, the article assesses whether, and to what extent , the increased propensity of German companies to invest abroad indicates a n exodus of German industry and has negative effects on domestic jobs. The paper reviews the German Direct Foreign Investment (DFI) position in the 19 90s; compares it to those in other major industrialized countries, carries out a comparative evaluation of the cost and burden factors at the German l ocation; examines the reasons underlying the DFI decisions of German manufa cturing companies and the subsequent types of investment; and finally asses ses their effects on domestic investment and employment. The article ascert ains that, in spite of the relatively unfavorable comparison of important c ost and burden location factors, there are few grounds on which to connect the substantial increase in outward DFI in the 1990s to an exodus of German industry. The assessment supports the assertion that the net effect on dom estic investment and German jobs has been positive.