FOREIGN DIRECT INVESTMENT IN AMERICAN SERVICE SECTORS: SOURCE COUNTRY CONTRASTS AND LOCATIONAL DETERMINANTS

Breandán Ò HUallacháin

Papers in Regional Science, 1996, vol. 75, issue 3, 397-433

Abstract: ABSTRACT Foreign direct investment in United States service sectors is an essential component of the competition among global industrial core regions. European, Canadian, and Japanese firms generate most foreign services jobs. Acquisition is the favored mode of entry and foreign establishments are generally larger and pay higher wages than their domestic counterparts. Though the surge of foreign investment in the 1980s was sectorally extensive, jobs in foreign services firms grew much faster than those in manufacturing. This paper reports a regression analysis of the location of foreign employment in six disaggregated sectors across U.S. states in 1987. The results show that foreign and domestic interstate locational patterns of employment strongly correlate. Because acquisition is the most common mode of entry, this empirical finding suggests that the supply of acquisition candidates primarily decides foreign investors' locational choices. Additional influences on location include the concentration of jobs in foreign business and professional services firms in localized areas of production, a general attraction of foreign investors in most service sectors to states with skilled labor forces, and an avoidance of Rocky Mountain and Great Plains states. 1 found little evidence that foreign investors in services avoid high‐wage states mort: than their domestic counterparts.

Date: 1996
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1111/j.1435-5597.1996.tb00671.x

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:presci:v:75:y:1996:i:3:p:397-433

Access Statistics for this article

Papers in Regional Science is currently edited by Jouke van Dijk

More articles in Papers in Regional Science from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().