Abstract
This study examined the effects of policy and non-policy variables on the location of new U.S. direct investment abroad (as distinct from reinvested earnings of existing affiliates), using 1977 and 1982 Benchmark data. The data revealed statistically significant effects for investment incentives (positive), performance requirements (negative), and host country effective tax rates (negative) with interesting differences between the two time periods and between developed versus developing countries. Significance was also found for non-policy variables such as political stability, cultural distance, GDP per capita, and infrastructure.
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*David Loree is a doctoral candidate at the University of Texas at Dallas, and will be joining the faculty of Texas A&M University in 1995. His dissertation extends the survival models of organizational ecology to include firm-level measures of participation and commitment in the international markets of the semiconductor integrated circuit industry.
**Stephen Guisinger is professor of international management studies at the University of Texas at Dallas. He is co-author of the Asia Pacific Investment Code, which was on the agenda of the 1994 Asia Pacific Economic Cooperation meeting in Jakarta, Indonesia.
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Loree, D., Guisinger, S. Policy and Non-Policy Determinants of U.S. Equity Foreign Direct Investment. J Int Bus Stud 26, 281–299 (1995). https://doi.org/10.1057/palgrave.jibs.8490174
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DOI: https://doi.org/10.1057/palgrave.jibs.8490174