B. Ohuallachain et N. Reid, SECTORAL DIFFERENCES IN THE DETERMINANTS OF THE LOCATION OF FOREIGN DIRECT-INVESTMENT IN AMERICAN MANUFACTURING, Papers in regional science, 75(2), 1996, pp. 201-235
Foreign direct investment in the United States is an integral part of
the competition among global industrial core regions. Most foreign inv
estment in the U.S. originates in Europe, Canada, and Japan. Acquisiti
on rather than new plant establishment is the favored mode of investme
nt and the interregional supply of potential acquisition candidates co
nstrains foreign investors' locational choices. This paper provides an
analysis of the location of foreign employment in 15 disaggregated se
ctors across U.S. states in 1990. The results show that foreign firms
concentrate employment in existing regions of production. Foreign inve
stments in most raw materials processing sectors particularly favor th
ese places. Some decentralization has occurred in several sectors, esp
ecially food, paper, chemicals and petroleum, rubber and plastics, sto
ne, clay and glass products, and primary metals. Other significant det
erminants of location include labor force characteristics and certain
regional preferences. No evidence was found in our analysis of disaggr
egate sectors that foreign investors avoid strong unions more than the
ir domestic counterparts.