INDUSTRY-BASED FOREIGN DIRECT INVESTMENT AROUND STATE GUBERNATORIAL ELECTIONS: EVIDENCE FROM THE UNITED STATES

James Tanoos

Global Journal of Business Research, 2012, vol. 6, issue 5, 1-18

Abstract: American governors acquire enhanced regulatory and decision-making powers for economic development, the prevalence of statewide business scorecards and other factors are prompting voters to make these politicians and their agents responsible for the financial well-being of their states. Consequently, governors are expanding their policymaking authority and have gone to greater lengths to entice global executives to commit their increasingly mobile capital to their locales in efforts to increase jobs. More than any other sector, manufacturing is the area in which American incoming foreign direct investment is concentrated or what this study will refer to as international industry investment. Data has been collected from three global-manufacturing related Bureau of Economic Analysis datasets, namely FDI in the US- Employment of Nonbank U.S. Affiliates, by State, FDI in the US- Manufacturing Employment of Majority-Owned Nonbank U.S. Affiliates, and Gross Property, Plant, and Equipment of Nonbank U.S. Affiliates, by State. Based on a cross-sectional analysis of this information and gubernatorial tenure, it has been determined that global executives are most likely to devote their industry-based capital to a state in the year after the reelection of a governor and in the second term of an administration.

Keywords: Administration; Agents; Politics; Capital Mobility; Communication; Competitive Advantage; Economic Development; Election; Foreign Direct Investment; Trade (search for similar items in EconPapers)
JEL-codes: A11 B22 C21 D72 D73 (search for similar items in EconPapers)
Date: 2012
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