Metropolitan Statistical Area Location Choice by Foreign Direct Investors in the United States

Thomas Anderson
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Thomas Anderson: Bureau of Economic Analysis

BEA Working Papers from Bureau of Economic Analysis

Abstract: The importance of new foreign direct investment as a vehicle for the formation of productive capital has stimulated interest in understanding why multinational enterprises choose particular locations for their investments. Using data from greenfield investments reported on the Bureau of Economic Analysis Survey of New Foreign Direct Investment in the United States, I analyze how locational characteristics influence the choice of where foreign multinational enterprises establish their new investments in the United States. Identifying location choice at the metropolitan statistical area level allows me to analyze both traditional determinants of location choice, such as industrial agglomeration as well as measures of international connectivity that have been studied in research on global cities. My results support the finding that global cities are attractive to foreign direct investors in the United States not just by virtue of their population or industrial agglomeration, which serve to attract investment, but by virtue of a much wider set of attributes, related to their demography and connections to the wider world.

JEL-codes: F23 R30 (search for similar items in EconPapers)
Date: 2020-05
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Persistent link: https://EconPapers.repec.org/RePEc:bea:wpaper:0178

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