The location of inward investment, technical change and skilled labour: Evidence from the United States.

Abstract

This study provides an empirical analysis of US inward foreign direct investment (FDI) with particular reference to the role of skilled labour. The theoretical foundations of the analysis are rooted in OLI theory and, in particular, its locational aspects. However, the empirical techniques employed are e more commonly associated with factor proportions theory. Thus, the contribution of the paper is partly methodological in applying such techniques to the determinants of inward FDI. The paper also produces evidence that US inward FDI is focused on skill intensive economic activities, using multiple categories of skilled labour. It also finds that strategic asset seeking behaviour focused on skilled labour overlaps with efficiency seeking behaviour linked to productivity change, export activity and market seeking behaviour.