We show that giant and unpredictable oil and gas discoveries trigger FDI bonanzas. Across developing countries, we document a 56% increase in FDI in the two years following a giant discovery. These booms are driven by new projects in sectors such as manufacturing, retail, services, and construction. To assess the job creation effects of one such FDI bonanza in Mozambique, we combine concurrent waves of household surveys and firm censuses and estimate the local job multiplier of FDI. Our estimates suggest that for each new FDI job, an additional 4.4 jobs are created locally, 2.1 of which are formal jobs.

This content is only available as a PDF.

Supplementary data

You do not currently have access to this content.