Location determinants of new foreign-owned manufacturing plants

In this paper we examine the county-level pattern of new foreign-owned manu facturing plants in the United States from 1989 through 1994. We construct a model to produce insights into the differences in the location of these p lants among Bureau of Economic Analysis regions, as well as between rural a nd urban counties. Higher levels of economic size, educational attainment, the existing manufacturing base, and transportation infrastructure are foun d to be associated with larger numbers of new foreign-owned plants. Meanwhi le, higher levels of taxes and labor-intensiveness are found to be associat ed with smaller numbers of new plants. Comparing regions, we find that the main advantages of the Southeast region stem from a relatively high manufac turing base and relatively low taxes. Comparing urban with rural counties, we find that urban counties possess more favorable average values for nearl y all the explanatory variables.