Foreign Direct Investment in the United States∗

ABSTRACT The recent, dramatic increase in the flow of foreign direct investment capital into the American manufacturing sector raises the question of how closely the locational pattern of foreign-owned subsidiaries in the U.S. corresponds to the spatial distribution of American domestic firms. Although foreign investors have generally lagged behind the spatial decentralization tendencies of American manufacturers, their most recent locational choices within the U.S. have revealed a strong preference for regions outside the country's traditional manufacturing heartland. Notes ∗ Thanks are extended to the Institutional Funds Committee of the State University of New York at Buffalo, to the National Science Foundation (Grant No. SOC78-24398), and to an anonymous reviewer.