The Effects of Foreign Capital on State Economic Growth

Megan A. Torau and Ernest Goss
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Megan A. Torau: Columbia University
Ernest Goss: Creighton University

Economic Development Quarterly, 2004, vol. 18, issue 3, 255-268

Abstract: U.S. Bureau of Economic Analysis data show that the nation’s rate of yearly output growth between 1995 and 1999 was more than 50% higher than for the period 1987 to 1994. Using state-level data, this study examines foreign capital’s contribution to this upturn in growth. Pooling data for the 50 states in a regression framework showed that foreign capital accounted for 2.6% of overall state output growth for the full period. Foreign capital made no contribution between 1987 and 1994 but accounted for 3.7% of output growth between 1995 and 1999. Furthermore, estimates show that foreign capital had a much larger impact on the manufacturing sector, accounting for more than 16.7% of state manufacturing output growth between 1995 and 1999.

Keywords: foreign capital; domestic capital; economic growth (search for similar items in EconPapers)
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:sae:ecdequ:v:18:y:2004:i:3:p:255-268

DOI: 10.1177/0891242404265994

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