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The Effects of Foreign Capital on State Economic Growth

Author

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  • Megan A. Torau

    (Columbia University)

  • Ernest Goss

    (Creighton University)

Abstract

U.S. Bureau of Economic Analysis data show that the nation’s rate of yearly output growth between 1995 and 1999 was more than 50% higher than for the period 1987 to 1994. Using state-level data, this study examines foreign capital’s contribution to this upturn in growth. Pooling data for the 50 states in a regression framework showed that foreign capital accounted for 2.6% of overall state output growth for the full period. Foreign capital made no contribution between 1987 and 1994 but accounted for 3.7% of output growth between 1995 and 1999. Furthermore, estimates show that foreign capital had a much larger impact on the manufacturing sector, accounting for more than 16.7% of state manufacturing output growth between 1995 and 1999.

Suggested Citation

  • Megan A. Torau & Ernest Goss, 2004. "The Effects of Foreign Capital on State Economic Growth," Economic Development Quarterly, , vol. 18(3), pages 255-268, August.
    • Handle: RePEc:sae:ecdequ:v:18:y:2004:i:3:p:255-268
    DOI: 10.1177/0891242404265994
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    References listed on IDEAS

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