IDEAS home Printed from
   My bibliography  Save this article

Determinants of Foreign Direct Investment in the Food-Processing Industry: A Comparative Analysis of Developed and Developing Economies


  • Makki, Shiva S.
  • Somwaru, Agapi
  • Bolling, H. Christine


This paper analyzes the determinants of foreign direct investments by the U.S. food-processing industry in developed and developing countries. We find that market size, per-capita income, and trade openness significantly affect U.S. food-processing firmsÂ’' decisions to invest abroad, but their influence differs between developed and developing countries. Economic development is positively associated with FDI in developing countries but negatively associated in developed countries. Market size is a major determinant of FDI only in developed economies. Trade openness seems to be important for sales by U.S. foreign affiliates in both developed and developing countries and for exports to developed country markets.

Suggested Citation

  • Makki, Shiva S. & Somwaru, Agapi & Bolling, H. Christine, 2004. "Determinants of Foreign Direct Investment in the Food-Processing Industry: A Comparative Analysis of Developed and Developing Economies," Journal of Food Distribution Research, Food Distribution Research Society, vol. 35(03), November.
  • Handle: RePEc:ags:jlofdr:27558

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Munisamy Gopinath & Daniel Pick & Utpal Vasavada, 1999. "The Economics of Foreign Direct Investment and Trade with an Application to the U.S. Food Processing Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(2), pages 442-452.
    2. Bolling, H. Christine & Neff, Steven & Handy, Charles R., 1998. "U.S. Foreign Direct Investment in the Western Hemisphere Processed Food Industry," Agricultural Economics Reports 34017, United States Department of Agriculture, Economic Research Service.
    3. Fung, K. C. & Iizaka, Hitomi & Parker, Stephen, 2002. "Determinants of U.S. and Japanese Direct Investment in China," Journal of Comparative Economics, Elsevier, vol. 30(3), pages 567-578, September.
    4. Goldberg, Linda S & Kolstad, Charles D, 1995. "Foreign Direct Investment, Exchange Rate Variability and Demand Uncertainty," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(4), pages 855-873, November.
    5. Kenneth A. Froot & Jeremy C. Stein, 1991. "Exchange Rates and Foreign Direct Investment: An Imperfect Capital Markets Approach," The Quarterly Journal of Economics, Oxford University Press, vol. 106(4), pages 1191-1217.
    Full references (including those not matched with items on IDEAS)


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

    Cited by:

    1. Bolling, Christine & Shane, Mathew & Roe, Terry, 2007. "Exchange Rates and U.S. Foreign Direct Investment in the Global Processed Food Industry," Agricultural and Resource Economics Review, Cambridge University Press, vol. 36(02), pages 230-238, October.
    2. Asgari, Mahdi, 2016. "U.S. Food Manufacturing Industry: The Choice of Exports vs. FDI," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 230135, Southern Agricultural Economics Association.
    3. Mankan M. Koné & Carl Gaigné & Lota Dabio Tamini, 2017. "Supply Uncertainty and Foreign Direct Investments in Agri-food Industry," CIRANO Working Papers 2017s-22, CIRANO.

    More about this item


    International Relations/Trade;


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:jlofdr:27558. 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: (AgEcon Search). General contact details of provider: .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.