The Location of Foreign Direct Investment in the United States: Patterns and Determinants

Abstract

The internationalization of the U.S. economy over the past fifteen years has had a discernible impact on regional development. This paper is an analysis of the regional effects of inward foreign direct investment, a particularly dynamic component of the internationalization process. Foreign direct investment dispersed over time, with the locations of foreign operations becoming more like those of U.S. firms. Regression results demonstrate that the location of foreign-owned property, plant, and equipment can be explained by variables representing: energy costs, infrastructure/transportation, and labor climate.