Project Summary

Foreign direct investment is an integral part of the world economy and a major driver of economic growth. A significant proportion of these investment activities take place between developed countries, which is particularly applicable for the food industry. At the same time, most studies concerned with foreign direct investment look at the impact in developing countries, while we know less about this relationship in developed countries. The lack of reliable historical data is a primary explanation for this discrepancy. Such information is needed to detect the determinants of foreign direct investment and measure their impact on economic outcomes. To address this issue, we will compile a complete dataset on foreign direct investment in the food industry covering the last thirty years. We will draw from different data sources to include both greenfield and brownfield foreign direct investment and supplement this dataset with a rich set of additional information for each investment deal, covering national, state, industry, and firm and establishment characteristics. We will use this data to study the determinants of foreign direct investment at the federal and state levels using reduced form regression methods to control for unobserved time-invariant characteristics. The results will provide novel insights on foreign direct investment in the food industry and deliver data-driven explanations for state-level differences in investment activities. By expanding the knowledge about this relationship, we will contribute to the public discussion on the effects of foreign direct investment and provide policymakers the necessary tools to develop appropriate policy measures. Therefore, our research adds to the common agricultural policy goal of making the food production system in the United States more competitive in the global economy.