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Size, Location and Agglomeration of Inward Foreign Direct Investment (FDI) in the United States

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  • Thomas Halvorsen

Abstract

Halvorsen T. Size, location and agglomeration of inward foreign direct investment (FDI) in the United States, Regional Studies . Since the late 1970s a range of economic development policies to attract foreign direct investments (FDIs) have been tried out. Despite a policy reorientation from a large-size bias to policies also favouring smaller investments, little empirical work has been performed on the determinants of investment size. This paper presents empirical evidence on how the size of FDIs is determined by agglomeration and other state-level factors. The results indicate that FDI agglomeration and urbanization affect investment size and that taxes, markets, labour, land and the concentration of scientific knowledge are important determinants in the size composition of FDI. Halvorsen T. Le montant, la localisation et l'agglom�ration de l'investissement direct �tranger (IDE) aux Etats-Unis, Regional Studies . Depuis la fin des ann�es 1970, on met en vigueur toute une s�rie de politiques de d�veloppement �conomique afin de s�duire l'investissement direct �tranger. En d�pit d'une r�orientation de la politique d'une tendance à la taille vers des politiques plutôt en faveur des investissements plus modestes, rares sont les recherches empiriques sur les d�terminants du montant de l'investissement. Cet article cherche à pr�senter des preuves empiriques sur la d�termination du montant de l'IDE en fonction de l'agglom�ration et d'autres facteurs au niveau de l'Etat. Les r�sultats laissent voir que l'agglom�ration et l'urbanisation de l'IDE influencent le montant de l'investissement, et que les impôts, les march�s, la main-d'oeuvre, le terrain, et la concentration de la connaissance scientifique sont d'importants d�terminants de la structure du montant de l'IDE. Investissement direct �tranger (IDE) Economies d'agglom�ration Montant de l'investissement Etats-Unis Halvorsen T. Umfang, Standort und Agglomeration von ausländischen Direktinvestitionen in den USA, Regional Studies . Seit dem Ende der siebziger Jahre des 20. Jahrhunderts wurden verschiedene Wirtschaftsentwicklungspolitiken zur Anziehung von ausländischen Direktinvestitionen ausprobiert. Trotz einer politischen Umorientierung von einer Bevorzugung umfangreicher Investitionen hin zu einer Begünstigung auch von kleineren Investitionen wurden über die Determinanten für den Umfang der Investition bisher nur wenige empirische Studien durchgeführt. In diesem Beitrag werden empirische Belege zur Frage vorgestellt, wie die Höhe von ausländischen Direktinvestitionen von der Agglomeration und von anderen Faktoren auf Staatsebene bestimmt wird. Aus den Ergebnissen geht hervor, dass sich die Agglomeration und Urbanisierung von ausländischen Direktinvestitionen auf die Investitionshöhe auswirken und dass Steuern, Märkte, das Angebot an Arbeitskräften und Grundstücken sowie die Konzentration von wissenschaftlichem Wissen wichtige Determinanten für die Höhe und Zusammensetzung ausländischer Direktinvestitionen darstellen. Ausländische Direktinvestitionen Agglomerationswirtschaften Investitionsh öhe USA Halvorsen T. Tamaño, ubicación y aglomeración de la inversión extranjera directa interna (IDE) en los Estados Unidos, Regional Studies . Desde finales de los setenta se han puesto en marcha una serie de pol�ticas de desarrollo económico para atraer la inversión directa extranjera (IDE). Pese a una reorientación pol�tica desde una predisposición de inversiones importantes hacia pol�ticas que tambi�n favorecen inversiones más pequeñas, se ha realizado poco trabajo emp�rico sobre los determinantes del tamaño de las inversiones. En este art�culo presentamos evidencia emp�rica que demuestra que el tamaño de la IDE está determinado por la aglomeración y otros factores a nivel estatal. Los resultados indican que la aglomeración y la urbanización de la IDE afectan al tamaño de la inversión y que los impuestos, los mercados, la mano de obra, el suelo y la concentración de conocimiento cient�fico son determinantes importantes en la composición del tamaño de la IDE. Inversión directa extranjera (IDE) Econom�as de aglomeración Tamaño de la inversion Estados Unidos

Suggested Citation

  • Thomas Halvorsen, 2012. "Size, Location and Agglomeration of Inward Foreign Direct Investment (FDI) in the United States," Regional Studies, Taylor & Francis Journals, vol. 46(5), pages 669-682, June.
    • Handle: RePEc:taf:regstd:v:46:y:2012:i:5:p:669-682
    DOI: 10.1080/00343404.2010.506186
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    References listed on IDEAS

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    1. Hogenbirk, Annelies & Narula, Rajneesh, 2004. "Location and agglomeration of FDI in The Netherlands: implications for policy," Research Memorandum 006, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    2. Wagner, Alfred, 1891. "Marshall's Principles of Economics," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 5, pages 319-338.
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    1. Fang Wang & Ming-Hua Tian & Zhong-Hua Yin, 2021. "Modern urbanization and industrial upgrading in China: evidence from panel data," Quality & Quantity: International Journal of Methodology, Springer, vol. 55(2), pages 661-681, April.
    2. Steven Brakman & Harry Garretsen & Charles van Marrewijk & Arjen van Witteloostuijn, 2023. "The location of cross‐border and national mergers and acquisitions within the United States," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 32(1), pages 177-206, January.
    3. Gonchar, Ksenia & Marek, Philipp, 2013. "Natural-resource or Market-seeking FDI in Russia? An Empirical Study of Locational Factors Affecting the Regional Distribution of FDI Entries," IWH Discussion Papers 3/2013, Halle Institute for Economic Research (IWH).
    4. Steven Brakman & Harry Garretsen & Charles van Marrewijk & Charles van Marrewijk, 2015. "The Location of Cross-Border Mergers & Acquisitions in the USA," CESifo Working Paper Series 5331, CESifo.
    5. Anderson, John & Sutherland, Dylan & Severe, Sean, 2015. "An event study of home and host country patent generation in Chinese MNEs undertaking strategic asset acquisitions in developed markets," International Business Review, Elsevier, vol. 24(5), pages 758-771.
    6. Wencong Lu & Ikboljon Kasimov & Ibrokhim Karimov & Yakhyobek Abdullaev, 2020. "Foreign Direct Investment, Natural Resources, Economic Freedom, and Sea-Access: Evidence from the Commonwealth of Independent States," Sustainability, MDPI, vol. 12(8), pages 1-18, April.
    7. Shima'a Hanafy, 2015. "Determinants of FDI Location in Egypt—Empirical Analysis Using Governorate Panel Data," MAGKS Papers on Economics 201513, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    8. Shima’a Hanafy, 2014. "Determinants of FDI Location in Egypt: Empirical Analysis Using Governorate Panel Data," Working Papers 875, Economic Research Forum, revised Nov 2014.
    9. Tiago Loncan, 2021. "The Effects of Project Scale on FDI Location Choices: Evidence from Emerging Economies," Management International Review, Springer, vol. 61(2), pages 157-205, April.
    10. West Togbetse & Camelia Turcu, 2023. "Chinese FDI in Africa, natural resources and the energy transition challenges," Working Papers 2023.15, International Network for Economic Research - INFER.
    11. Chih-Hai Yang & Chung-Yueh Chiu & Meng-Wen Tsou, 2017. "Location Choice of Multinational and Local Firms in Vietnam: Birds of a Feather Flock Together?," The Japanese Economic Review, Springer, vol. 68(1), pages 95-114, March.
    12. Kandogan, Yener, 2012. "Regional foreign direct investment potential of the states within the US," Journal of Economics and Business, Elsevier, vol. 64(4), pages 306-322.
    13. Tag, Mehmet Nasih & Degirmen, Suleyman, 2022. "Economic freedom and foreign direct investment: Are they related?," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 737-752.
    14. Davide Castellani & Giulio Giangaspero & Antonello Zanfei, 2013. "Heterogeneity and distance. Some propositions on how differences across regions, firms and functions affect the role of distance in FDI location decisions," Working Papers 1308, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2013.

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