Foreign Direct Investment in America's Automotive Industry
Abstract (Summary)This paper investigates the factors that lead a foreign automaker to invest in a particular state. It examines variables that gauge a state’s manufacturing development, labor union activity, and economic environment. The analysis is done in two parts. First, a classification tree analysis is conducted on data representing greenfield auto assembly investments. It includes observations of states that did receive investment and states that did not receive investment in order to identify the principal differences. The second analysis is a case study of Honda in Ohio. The key factors that attracted Honda to Ohio are identified and described. This paper concludes that the attribution to Southern states’ low union activity rate as one of the most important reasons for attracting investment is overstated. Furthermore, the industrial development and the presence of American automakers, what many have described as a weakness in Midwestern states, may actually become an attractive feature in the near future.
School Location:USA - Ohio
Source Type:Master's Thesis
Date of Publication:01/01/2006