Date of Award

Winter 2002

Project Type

Dissertation

Program or Major

Economics

Degree Name

Doctor of Philosophy

First Advisor

Chairs: Bruce T Elmslie

Second Advisor

Jonathan C Rork

Abstract

The period between 1978 and 1997 was characterized by a major influx of foreign direct investment (FDI to the United States. In 1997, foreign controlled firms accounted for 6.3 percent of US GDP, 4.9 percent of non-bank employment, 20 percent of US exports of goods, 30 percent of US imports of goods, and 12 percent of firm R&D. However, due to data limitations, previous research has examined the impact of FDI on growth only at the country level. By constructing a new stock measure of FDI---the employment measure---I am able to disaggregate FDI across states. This allows an examination of the impact of FDI on growth at the state level. Because spillovers tend to be local in nature, such a focus gives a better understanding of the impact FDI can have in the growth process. Furthermore, because ownership should be conceptualized as an on-going relationship, this new stock measure, which proxies for a continuing flow of benefits (information, technology, know-how and etc. from the source to the host economy, captures these benefits better than those based on one time investment flows. Drawing on ideas present in the areas of economic growth, international trade, knowledge spillovers, regional science, and the multinational firm, my dissertation examines the impact of foreign direct investment (FDI) at the state level.

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