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Title:Does foreign direct investment promote regional development in developed countries? A Markov chain approach for US states PDF Logo
Authors:Bode, Eckhardt
Nunnenkamp, Peter
Issue Date:2007
Citation:[Series:] Kiel working paper [Editor:] Institut für Weltwirtschaft, Kiel [No.:] 1374
Series/Report no.:Kieler Arbeitspapiere 1374
Abstract:This paper investigates the effects of inward FDI on per-capita income and growth of the US states since the mid-1970s. Using a Markov chain approach, it shows that both quantitative and qualitative characteristics of FDI affect per-capita income and growth. Employment-intensive FDI, concentrated in richer states, has been conducive to income growth, while capital-intensive FDI, concentrated in poorer states, has not. FDI has consequently tended to slow down rather than foster income convergence among US states. It appears to be less important whether FDI has been undertaken in the manufacturing sector of US states or in other sectors.
Subjects:Markov transition probability
Likelihood ratio test
FDI
Per-capita income
Regional development
United States of America
JEL:O18
O51
F23
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des IfW
Kieler Arbeitspapiere, IfW

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