Melting Pot or Salad Bowl: Some Evidence from U.S. Investments Abroad

49 Pages Posted: 6 Aug 2003

See all articles by Utpal Bhattacharya

Utpal Bhattacharya

HKUST Business School

Peter Groznik

University of Ljubljana - Faculty of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: July 2007

Abstract

We estimate the number of immigrants in the United States classified by their country of origin from census data in 1970, 1980, 1990 and 2000. We find, both in cross-sectional tests and in panel data tests, that the size of the immigrant group from a country living in the U.S. is positively correlated with U.S. investments in that country. This national origin bias is strong for direct (FDI) and modest for indirect (equity holdings) investments. The results continue to hold even after controlling for the "fundamentals" hypothesized to affect foreign investments. The other economic geography variables of a country - physical distance from the U.S., race, language and religion - do not seem to affect U.S. investments in that country.

Keywords: Economic Geography, Foreign Direct Investment, Foreign Stockholdings

JEL Classification: G11, G15

Suggested Citation

Bhattacharya, Utpal and Groznik, Peter, Melting Pot or Salad Bowl: Some Evidence from U.S. Investments Abroad (July 2007). EFA 2003 Annual Conference Paper No. 650, Available at SSRN: https://ssrn.com/abstract=290830 or http://dx.doi.org/10.2139/ssrn.290830

Utpal Bhattacharya (Contact Author)

HKUST Business School ( email )

Clear Water Bay
Kowloon
Hong Kong

Peter Groznik

University of Ljubljana - Faculty of Economics ( email )

Kardeljeva ploscad 17
Ljubljana, 1000
Slovenia

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