Foreign direct investment’s role in strengthening metro manufacturing: A case study of the U.S. state of Georgia

Though concern has arisen in recent years over manufacturing job losses in major U.S. metropolitan areas, this study demonstrates that foreign manufacturing firms still tend to locate in such areas. Using longitudinal data from the National Establishment Time-Series data set for the state of Georgia, we examine intrastate spatial patterns of manufacturing foreign direct investment (FDI) employment and associated underlying location factors. We find a strong spatial concentration of manufacturing FDI employment in metropolitan areas over time, particularly in the Atlanta metropolitan statistical area (MSA), the largest metropolitan area in the state. The results of the panel regression analysis suggest that existing agglomerations of innovative firms and institutions, a pool of highly educated workers, highly developed transportation networks, and critical links to domestic and international markets in metropolitan areas are key attraction factors for manufacturing FDI.