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Foreign Direct Investment and Regional Economic Performance

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  • John K. Mullen
  • Martin Williams

Abstract

Although foreign direct investment into developed economies continues to show dramatic growth, little consensus exists over either its national or regional impacts. The lack of empirical evidence, particularly on a sub‐national level, adds to the uncertainty over the efficacy of regional development strategies focused on attracting foreign investment. The present research uses book value and employment measures of U.S. state‐level FDI activity to assess the impact of foreign capital on regional growth and productivity performance. The results imply a vital role for FDI in stimulating regions within well‐integrated, developed economies.

Suggested Citation

  • John K. Mullen & Martin Williams, 2005. "Foreign Direct Investment and Regional Economic Performance," Kyklos, Wiley Blackwell, vol. 58(2), pages 265-282, May.
    • Handle: RePEc:bla:kyklos:v:58:y:2005:i:2:p:265-282
    DOI: 10.1111/j.0023-5962.2005.00288.x
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    1. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, vol. 42(3-4), pages 371-393, May.
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    3. Imad A. Moosa, 2002. "Foreign Direct Investment," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-4039-0749-3, December.
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    Cited by:

    1. Eckhardt Bode & Peter Nunnenkamp & Andreas Waldkirch, 2012. "Spatial effects of foreign direct investment in US states," Canadian Journal of Economics, Canadian Economics Association, vol. 45(1), pages 16-40, February.
    2. Mitze, Timo, 2014. "Measuring Regional Spillovers in Long- and Short-Run Models of Total Factor Productivity, Trade, and FDI," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 37(3), pages 365-388.
    3. Tomasz Dorożyński & Janusz Świerkocki & Wojciech Urbaniak, 2015. "Incentives for Attracting FDI: The Case of the Lodz Region," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1, pages 147-169.
    4. Nikos Benos & Nikolaos Mylonidis & Stefania Zotou, 2017. "Estimating production functions for the US states: the role of public and human capital," Empirical Economics, Springer, vol. 52(2), pages 691-721, March.
    5. Eckhardt Bode & Peter Nunnenkamp, 2011. "Does foreign direct investment promote regional development in developed countries? A Markov chain approach for US states," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(2), pages 351-383, June.
    6. Temiz, Dilek & Gökmen, Aytaç, 2014. "FDI inflow as an international business operation by MNCs and economic growth: An empirical study on Turkey," International Business Review, Elsevier, vol. 23(1), pages 145-154.
    7. Miao Wang & M. C. Sunny Wong, 2009. "What Drives Economic Growth? The Case of Cross‐Border M&A and Greenfield FDI Activities," Kyklos, Wiley Blackwell, vol. 62(2), pages 316-330, April.
    8. Laura Casi & Laura Resmini, 2017. "Foreign direct investment and growth: Can different regional identities shape the returns to foreign capital investments?," Environment and Planning C, , vol. 35(8), pages 1483-1508, December.
    9. Tuan, Chyau & Ng, Linda F.Y. & Zhao, Bo, 2009. "China's post-economic reform growth: The role of FDI and productivity progress," Journal of Asian Economics, Elsevier, vol. 20(3), pages 280-293, May.
    10. Elias Ajaga & Peter Nunnenkamp, 2008. "Inward FDI, Value Added and Employment in US States: A Panel Cointegration Approach," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 63(04), pages 347-367, December.
    11. Steven Yamarik, 2011. "Human capital and state-level economic growth: what is the contribution of schooling?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 47(1), pages 195-211, August.
    12. Tuan, Chyau & Ng, Linda Fung-Yee, 2007. "The place of FDI in China's regional economic development: Emergence of the globalized delta economies," Journal of Asian Economics, Elsevier, vol. 18(2), pages 348-364, April.
    13. Faruk G rsoy & H seyin Kalyoncu, 2012. "Foreign Direct Investment and Growth Relationship in Georgia," International Journal of Economics and Financial Issues, Econjournals, vol. 2(3), pages 267-271.
    14. Anna Golejewska, 2012. "Human capital and regional growth perspective," Working Papers of Economics of European Integration Division 1204, The Univeristy of Gdansk, Faculty of Economics, Economics of European Integration Division.
    15. Banerjee, Tannista & Nayak, Arnab, 2017. "Multinational investments and product sophistication," Economics Letters, Elsevier, vol. 161(C), pages 157-163.
    16. Md. Qamruzzaman & Salma Karim, 2020. "Nexus between Economic Volatility, Trade Openness and FDI: An Application of ARDL, NARDL and Asymmetric Causality," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 10(7), pages 790-807, July.
    17. Ines Kersan-Skabic & Lela Tijanic, 2014. "The Influence of Foreign Direct Investments on Regional Development in Croatia," Croatian Economic Survey, The Institute of Economics, Zagreb, vol. 16(2), pages 59-90, December.
    18. Dina Dardir, 2020. "Does the R&D Public Procurement Matter for High-Tech Exports? Evidence from the USA," Post-Print hal-04048942, HAL.
    19. Capello Robertta & Fratesii Ugo, 2014. "Growth Patterns in Global Regions:: Do Specific Success Factors Make a Difference?," Journal of Heterodox Economics, Sciendo, vol. 1(1), pages 54-78, June.
    20. Makram El‐Shagi & Steven Yamarik, 2019. "State‐level capital and investment: Refinements and update," Growth and Change, Wiley Blackwell, vol. 50(4), pages 1411-1422, December.
    21. Ze, Fu & Yu, Wence & Ali, Anis & Hishan, Sanil S. & Muda, Iskandar & Khudoykulov, Khurshid, 2023. "Influence of natural resources, ICT, and financial globalization on economic growth: Evidence from G10 countries," Resources Policy, Elsevier, vol. 81(C).
    22. Argentino Pessoa, 2008. "Multinational Corporations, Foreign Investment, and Royalties and License Fees: Effects on Host-Country Total Factor Productivity," Notas Económicas, Faculty of Economics, University of Coimbra, issue 28, pages 6-31, December.
    23. Bradley Ewing & Benhua Yang, 2009. "The Differential Growth Effect of FDI across US Regions," International Economic Journal, Taylor & Francis Journals, vol. 23(4), pages 511-525.
    24. Catalina Amuedo‐Dorantes & Cynthia Bansak & Allan A. Zebedee, 2015. "The impact of mandated employment verification systems on state‐level employment by foreign affiliates," Southern Economic Journal, John Wiley & Sons, vol. 81(4), pages 928-946, April.

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