The Effects of Foreign Direct Investment on Local Communities

David N Figlio, Bruce A. Blonigen

Research output: Chapter in Book/Report/Conference proceedingChapter


Little evidence exists on the effects of foreign direct investment (FDI) on local communities in the United States, despite evidence that U.S. communities actively bid against each other for FDI. We use detailed county-level panel data from South Carolina across 5-year intervals from 1980 through 1995 to investigate the effect of foreign manufacturing plants on local labor markets and on the level and distribution of local government budgets. We find that foreign investment raises local real wages much more than does domestic investment, but lowers per capita county-government expenditures and redistributes monies away from public school expenditures.

Original languageEnglish (US)
Title of host publicationWorld Scientific Studies in International Economics
PublisherWorld Scientific Publishing Co. Pte Ltd
Number of pages32
StatePublished - 2019

Publication series

NameWorld Scientific Studies in International Economics
ISSN (Print)1793-3641


  • foreign direct investment
  • labor markets
  • local public finance

ASJC Scopus subject areas

  • Economics and Econometrics
  • Political Science and International Relations


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