State Investment Promotion & Foreign Investment in the Us

25 Pages Posted: 22 Jan 2007

See all articles by Wilbur Chung

Wilbur Chung

University of Maryland - Robert H. Smith School of Business

daniel fields

affiliation not provided to SSRN

Date Written: January 2007

Abstract

The individual states within the United States offer numerous incentives to entice international investment even though the effectiveness of doing so is unclear. Examining their effectiveness, we find that coastal states that offer more incentives do receive a greater annual share of foreign investment transactions into the US. As a second step, we consider what leads states to offer more or less incentives and find that states behave differently depending upon whether or not they are economically advantaged. Those that are advantaged offer fewer incentives, while those that are disadvantaged choose to offer more. For disadvantaged states, offering more incentives only partially offsets their lower attractiveness suggesting the limited effectiveness of investment promotion.

Keywords: investment promotion, FDI, location choice

JEL Classification: F23, R38

Suggested Citation

Chung, Wilbur C. and fields, daniel, State Investment Promotion & Foreign Investment in the Us (January 2007). Available at SSRN: https://ssrn.com/abstract=958636 or http://dx.doi.org/10.2139/ssrn.958636

Wilbur C. Chung (Contact Author)

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States

HOME PAGE: http://www.rhsmith.umd.edu/faculty/wchung/

Daniel Fields

affiliation not provided to SSRN

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