U.S. Processed Food Exports And Foreign Direct Investment In The Western Hemisphere
- Topics:
- Global Strategy
- Tags:
- Canada,
- Mexico,
- Manufacturing,
- Investment,
- Foreign Direct Investment (FDI),
- Foreign Direct Investment,
- Food & Beverage,
- Food,
- Finance,
- Currency & Foreign Exchange,
- ...
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Overview: U.S. exports of processed food products and sales by foreign affiliates of U.S. companies in the industry have been growing rapidly. Canada and Mexico are the United States’ two major trading partners in the Western Hemisphere, while small quantities of processed food products are exported to a number of other countries in the hemisphere. U.S. Foreign Direct Investment (FDI), like exports, is also largest in Canada and Mexico, but there is also significant FDI in the processed food industry in South American countries. The relationship between FDI and trade is subject to much debate and analysis. Results suggest that U.S. FDI and exports are complements. U.S. exports are also positively influenced by real GDP in the importing country and are negatively influenced by tariffs. FDI is negatively influenced by exchange rate volatility, which indicates that U.S. firms try to avoid unstable economies. Free trade agreements with Canada and Mexico also have significant positive effects on U.S. FDI. Results indicate that taking advantage of lower labor costs is not a motivating factor for U.S. firms, and that the real exchange rate does not have a significant effect on either FDI or exports.
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Format: PDF | Size: 281KB | Date: Jul 2002 | Pages: 27
