Productivity Effects of United States Multinational Enterprises : The Roles of Market Orientation and Regional Integration

Smeets R. and Wei Y. Productivity effects of United States multinational enterprises: the roles of market orientation and regional integration, Regional Studies. This paper considers the role of market orientation and regional integration in foreign direct investment (FDI) productivity effects. Using data of United States multinational enterprises operating in eight industries and thirteen Organisation for Economic Co-operation and Development (OECD) countries during 1987–2003, the productivity effects of local market-oriented FDI versus export-oriented FDI are compared, with the latter being split into FDI oriented at the parent and that at parties in third countries. Their productivity effects are also considered within two regional agreements: the Canadian–United States Free Trade Agreement (CUSFTA) and the European Union. Robust positive horizontal effects of parent firm-oriented FDI and third-country-oriented FDI are found, with notable differences in the effects of these FDI types between CUSFTA and...