Who Benefits More From Manufacturing Foreign Direct Investment? Examining Its Earnings Distribution Effects Across Earnings Quantiles

Abstract

Although several studies suggest foreign manufacturers in the United States may provide access to good quality employment opportunities with fair compensation and stable benefits, the question of who benefits more from the location of manufacturing foreign direct investment (FDI) remains open. Using the National Establishment Time Series data set and individual earnings data from the American Community Survey Public Use Microdata Sample files, this research conducts a quantile regression to estimate the earnings distribution effects that a concentration of manufacturing FDI may have on different earnings groups in Georgia between 2004 and 2010. The research does not measure inequality directly, but the findings both from place-of-work and place-of-residence earnings analyses suggest strong implications relating to the issue of inequality among people. The concentration of manufacturing FDI in a certain area shows the largest distribution effects on area workers in the lower earnings group and residents in the middle earnings group.