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The paper aims at providing evidence on the impact on employment of outward foreign direct investment, particularly from developed countries into low‐wage countries, which is a major concern in many developed countries.

The effects of foreign production undertaken by Belgian foreign‐oriented companies on employment in Belgium are investigated by performing econometric tests for complementarity or substitution between home and affiliate employment. The data are from the Amadeus database and consist of a sample of 254 Belgian parent companies with foreign affiliates in low‐wage and other high‐wage European countries during the 1999‐2007 period.

The results show that, given the size of parent production in the home country, Belgian multinational enterprises with foreign affiliates in higher‐wage European countries tend to employ more labour at home the more they produce in the host country. This probably reflects the needs of foreign affiliates in higher‐wage European countries for management and supervisory services from parent companies. Another explanation might be that Belgian outward FDI is largely vertical. In contrast, no evidence is found about employment reallocation between parents and affiliates operating in lower‐wage European countries.

The paper provides evidence on overall effects on employment in Belgium of its outward foreign direct investment for the period 1999‐2007, i.e. using the most recent data available. In contrast to many other studies, statistical diagnostic tests were carried out to choose the appropriate model to best fit the data.

The aim of this paper is to investigate the impact of changes in the Generalized System of Preferences of the European Union, on the EU GSP imports from beneficiary countries in ASEAN and China, and Latin America, respectively, and the utilization of GSP benefits by these countries for the period 1994‐2007.

The econometric model specifications used is with unlagged and one year lagged reactions. GSP dummy variables are added in order to test whether the changes in the EU GSP has had impact on bilateral trade flows and the degree of utilization.

The paper finds that EU GSP agricultural imports are negatively affected by the changes in the EU GSP system, but these of industrial products seem to have positively reacted to changes in the EU GSP. For imports of textile products, the results are not significant. It is also found that ASEAN plus China are significantly benefiting more from the EU GSP for industrial and textile products than the Latin American countries, but the changes in the GSP had no significant different effect on both groups of countries. The authors estimations also show that the graduation mechanism in the EU GSP, against beneficiary countries with higher EU market shares, seems to be effective for industrial products, but in contrast, is working in favour of such countries for textile products. By and large, the other graduation mechanism in the EU GSP linking GSP benefits and level of development of the beneficiary country has not been effective.

The paper is the first to address the issue how the many changes in the EU GSP since 1994 have affected the exports and GSP utilization of beneficiary countries.