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ABSTRACT
This study examines the spatial distribution of foreign direct investment (FDI) in finance, insurance, and real estate (FIRE) in the United States. A set of locational determinants is selected from the literature on the location of U.S. service industries to explain the pattern of foreign service firms' direct investment activity in the United States. These determinants are the agglomeration of domestic producer services, the share of metropolitan population, the value of commercial and industrial property, and population growth. The effects of these factors are also found to vary across U.S. regions. For example, an increase in the value of land parcels positively influenced the growth of FDI in the South. However, the effect of a rise in land value detracted foreign investment in the Northcentral region. Such findings necessitate future research on FDI in the nonmanufacturing sector at disaggregated spatial scales in order to understand the impact of FDI on local economies.