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Inward FDI, Value Added and Employment in US States: A Panel Cointegration Approach

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Author Info
Elias Ajaga
Peter Nunnenkamp
Abstract

This study investigates the long-run relationships between inward FDI and economic outcomes in terms of value added and employment at the level of US states. Johansen’s (1988) cointegration technique and Toda and Yamamoto’s (1995) Granger causality tests are applied to data for the period of 1977 to 2001. We find cointegration as well as two-directional causality between FDI and outcome variables. This holds for both measures of FDI (stocks and employment in foreign affiliates) and independently of whether we consider the states’ overall economy or their manufacturing sector

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Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1420.

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Length: 23 pages
Date of creation: May 2008
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Handle: RePEc:kie:kieliw:1420

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Related research
Keywords: FDI stocks; FDI-related employment; gross state product; manufacturing; Granger causality;

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Find related papers by JEL classification:
F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Regional, Urban, and Rural Analyses
O51 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

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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.:
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    Other versions:
  2. Robert E. Lipsey, 2002. "Home and Host Country Effects of FDI," NBER Working Papers 9293, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Toda, Hiro Y. & Yamamoto, Taku, 1995. "Statistical inference in vector autoregressions with possibly integrated processes," Journal of Econometrics, Elsevier, vol. 66(1-2), pages 225-250. [Downloadable!] (restricted)
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    Other versions:
  5. Konya, Laszlo, 2006. "Exports and growth: Granger causality analysis on OECD countries with a panel data approach," Economic Modelling, Elsevier, vol. 23(6), pages 978-992, December. [Downloadable!] (restricted)
  6. David Mayer-Foulkes & Peter Nunnenkamp, 2005. "Do Multinational Enterprises Contribute to Convergence or Divergence? A Disaggregated Analysis of US FDI," DEGIT Conference Papers c010_045, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
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  8. Coughlin, Cletus C & Terza, Joseph V & Arromdee, Vachira, 1991. "State Characteristics and the Location of Foreign Direct Investment within the United States," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 675-83, November. [Downloadable!] (restricted)
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  10. Eckhardt Bode & Peter Nunnenkamp, 2007. "Does Foreign Direct Investment Promote Regional Development in Developed Countries? A Markov Chain Approach for US States," Kiel Working Papers 1374, Kiel Institute for the World Economy. [Downloadable!]
  11. Bill Francis & Iftekhar Hasan & Maya Waisman, 2007. "Does geography matter to bondholders?," Working Paper 2007-02, Federal Reserve Bank of Atlanta. [Downloadable!]
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  13. Girma, Sourafel & Wakelin, Katharine, 2001. "Regional Underdevelopment: Is FDI the Solution? A Semiparametric Analysis," CEPR Discussion Papers 2995, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  14. Abdur Chowdhury & George Mavrotas, 2006. "FDI and Growth: What Causes What?," The World Economy, Blackwell Publishing, vol. 29(1), pages 9-19, 01. [Downloadable!] (restricted)
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  16. John K. Mullen & Martin Williams, 2005. "Foreign Direct Investment and Regional Economic Performance," Kyklos, Blackwell Publishing, vol. 58(2), pages 265-282, 04. [Downloadable!] (restricted)
  17. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Eckhardt Bode & Peter Nunnenkamp & Andreas Waldkirch, 2009. "Spatial Effects of Foreign Direct Investment in US States," Kiel Working Papers 1535, Kiel Institute for the World Economy. [Downloadable!]
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