Résumé
This study investigates the long-run relationships between inward FDI and economic outcomes in terms of value added and employment at the level of the US states. JOHANSEN'S (1988) co-integration technique and TODA and YAMAMOTO'S (1995) Granger causality tests are applied to data for the period of 1977 to 2001.We find cointegration as well as two-directional causality between FDI and outcome variables. This holds for both measures of FDI (stocks and employment in foreign affiliates) and independently of whether we consider the states' overall economy or their manufacturing sector. [PUB ABSTRACT]
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Extrait
Inward Fdi, Value Added and Employment in Us States: A Panel Cointegration Approach
1 Introduction
The economic impact of inward FDI in the United States has received scant attention in the literature. This is in striking contrast to the repercussions on US output and employment of outward FDI in less advanced host countries such as China, India and Mexico. This gap is all the more surprising once it is taken into account that inward FDI stocks in the US in 2005 were only 20 percent less than the FDI stocks the US held abroad (UNCTAD 2006, p. 303).US policymakers obviously expect FDI inflows to help improve income and employment prospects. US states compete aggressively for FDI (GRAHAM and KRUGMAN 1995; CASEY 1998; HEAD, RIES and SWENSON 1999; TORAU and GOSS 2004). For instance, the state of Alabama is reported to have spent US$ 150,000 per job created to attract a new Mercedes plant in 1994 (KELLER and YEAPLE 2003, p. 3). According to the earlier verdict of GLICKMAN and WOODWARD (1989), this is just "a mad scramble for the crumbs."We perform Granger causality tests within a panel cointegration framework to assess the output and employment effects of FDI at the level of US states. This approach appears well suited to address some of the theoretical ambiguities surrounding inward FDI in advanced host countries such as the U...Voir le contenu complet de ce document
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