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Inward FDI, Value Added and Employment in US States: A Panel Cointegration Approach

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  • Elias Ajaga
  • Peter Nunnenkamp
Abstract
This study investigates the long-run relationships between inward FDI and economic outcomes in terms of value added and employment at the level of US states. Johansen's (1988) cointegration 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.
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Suggested Citation

  • Elias Ajaga & Peter Nunnenkamp, 2008. "Inward FDI, Value Added and Employment in US States: A Panel Cointegration Approach," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 63(04), pages 347-367, December.
    • Handle: RePEc:usg:auswrt:2008:63:04:347-367
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    Cited by:

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    2. A. Oznur Umit & H. Isil Alkan, 2016. "The Effects of Foreign Direct Investments and Economic Growth on Employment and Female Employment: A Time Series Analysis With Structural Breaks For Turkey," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 9(3), pages 43-49, December.
    3. Eckhardt Bode & Peter Nunnenkamp & Andreas Waldkirch, 2012. "Spatial effects of foreign direct investment in US states," Canadian Journal of Economics, Canadian Economics Association, vol. 45(1), pages 16-40, February.
    4. repec:hal:cepnwp:halshs-01895223 is not listed on IDEAS
    5. Antonia Lòpez-Villavicencio & Luis Antonio Reyes Ortiz, 2018. "Is globalisation taking away jobs? An empirical assessment for advanced economies," Working Papers halshs-01895223, HAL.
    6. Yousafzai, Arshad Hayat, 2014. "Exploring the Causality and Co-integration Relationship between FDI, GDP and Employment: A Case of Czech Republic," MPRA Paper 54827, University Library of Munich, Germany.
    7. Yeboah Asuamah, Samuel, 2016. "Modelling the effect of climate change and globalisation on the manufacturing sector of Ghana," MPRA Paper 70108, University Library of Munich, Germany.

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    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

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