Market-Oriented Foreign Investment and Regional Development: Canadian Companies in Western New York

Abstract

Now-standard models of foreign direct investment need modification to explain the nature and location of cross-border investment flows into the U.S. These flows may be important for certain regional economies of the U.S. The market imperfections model of foreign direct investment (FDI) and evolving theories of enterprise internationalization are used to generate hypotheses concerning the sector, activity, and size mix of trans-border direct investment. From an investigation of Canadian-owned companies identified in western New York, support is found fora model of internationalization and for a limited role of FDI attraction in regional planning programs.