Advanced Search
MyIDEAS: Login to save this paper or follow this series

Location determinants of new foreign-owned manufacturing plants

Contents:

Author Info

  • Cletus C. Coughlin
  • Eran Segev

Abstract

Manufacturing employment in the United States has tended to fall since 1979. Geographically, the Northeast and Mideast regions have incurred the brunt of this decline and, except in the Southwest region, urban countries have tended to fare worse than rural countries. Meanwhile, foreign-owned manufacturing has been playing a larger role in the U.S. economy, especially in the Great Lakes and Southeast regions. The current research explains the pattern-among regions as well as between rural and urban countries-of new foreign plant location. Proxies measuring economic size, labor force quality, agglomeration and urbanization economies, and transportation infrastructure are found to affect the location of new foreign-owned plants positively, while proxies for unit labor costs and taxes are found to deter the location of new plants. The key advantages of the Great Lakes region stem from relatively low unit labor costs and high manufacturing density, while high manufacturing density and low taxes are the key advantages of the Southeast region. Comparing urban with rural countries, nearly all the explanatory variables possess average values for urban countries that are more favorable to foreign direct investment. For example, the labor force is relatively more productive and skilled in urban than in rural countries.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://research.stlouisfed.org/wp/more/1997-018
Download Restriction: no

File URL: http://research.stlouisfed.org/wp/1997/97-018.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Federal Reserve Bank of St. Louis in its series Working Papers with number 1997-018.

as in new window
Length:
Date of creation: 1997
Date of revision:
Publication status: Published in Journal of Regional Science, May 2000, 40(2), pp. 323-51
Handle: RePEc:fip:fedlwp:1997-018

Contact details of provider:
Postal: P.O. Box 442, St. Louis, MO 63166
Fax: (314)444-8753
Web page: http://www.stlouisfed.org/
More information through EDIRC

Order Information:
Email:

Related research

Keywords: Investments; Foreign - United States ; Manufactures ; Industrial location;

Other versions of this item:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Kozlowski, Paul J. & Weekly, James K., 1990. "Explaining Interstate Variations in Foreign Direct Investment in the United States," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 20(2).
  2. Keith Head & John Ries & Deborah Swenson, 1994. "Agglomeration Benefits and Location Choice: Evidence from Japanese Manufacturing Investment in the United States," NBER Working Papers 4767, National Bureau of Economic Research, Inc.
  3. Kozlowski, Paul J. & Solocha, Andrew & Dixon, Lori, 1994. "Attracting Foreign Direct Investments to States: Outcomes, Budgets, and Foreign Offices," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 24(2).
  4. Smith Jr. , Donald F. & Florida Richard, 1994. "Agglomeration and Industrial Location: An Econometric Analysis of Japanese-Affiliated Manufacturing Establishments in Automotive-Related Industries," Journal of Urban Economics, Elsevier, vol. 36(1), pages 23-41, July.
  5. Thomas H. Klier, 1995. "The geography of lean manufacturing: recent evidence from the U.S. auto industry," Economic Perspectives, Federal Reserve Bank of Chicago, issue Nov, pages 2-16.
  6. Keith Head & John C. Ries & Deborah L. Swenson, 1994. "The Attraction of Foreign Manufacturing Investments: Investment Promotion and Agglomeration Economies," NBER Working Papers 4878, National Bureau of Economic Research, Inc.
  7. Gerald Carlino & Richard Voith & Brian Cody, 1991. "The effects of exchange rate and productivity changes on U.S. industrial output at the state level," Working Papers 91-16, Federal Reserve Bank of Philadelphia.
  8. Dewenter, Kathryn L, 1995. "Do Exchange Rate Changes Drive Foreign Direct Investment?," The Journal of Business, University of Chicago Press, vol. 68(3), pages 405-33, July.
  9. Kravis, Irving B. & Lipsey, Robert E., 1982. "The location of overseas production and production for export by U.S. multinational firms," Journal of International Economics, Elsevier, vol. 12(3-4), pages 201-223, May.
  10. Cameron, A Colin & Trivedi, Pravin K, 1986. "Econometric Models Based on Count Data: Comparisons and Applications of Some Estimators and Tests," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(1), pages 29-53, January.
  11. J. Hatzius, 1997. "Foreign direct investment," LSE Research Online Documents on Economics 20351, London School of Economics and Political Science, LSE Library.
  12. James R. Hines Jr., 1993. "Altered States: Taxes and the Location of Foreign Direct Investment in America," NBER Working Papers 4397, National Bureau of Economic Research, Inc.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:fip:fedlwp:1997-018. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anna Xiao).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.