Should trade unions appreciate foreign direct investment

It is often argued that FDI hurts workers in the home country because jobs are moved abroad. Contrary to that view, businessmen often argue that FDI b enefits home workers because there will be an expansion in the firm. We sho w that both views may be corrects and whether home workers gain or lose on FDI depends on which kinds of activities the firm moves to the host country . If there is a big degree of substitutability (complementarity) between ac tivities in the home country and activities in the host country, it is like ly that the workers lose (gain) on FDI. (C) 2001 Elsevier Science B.V. All rights reserved.