Thus, compensation rates and sales may be related. Also, high U.S. affiliate sales may stimulate
higher compensation rates by U.S. affiliates in foreign countries.
Additionally, interest rates were found to positively influence U.S. FDI, contrary to our
expectations. An increase in the number of observations would help to improve these results.
This research examined the relationship between U.S. foreign direct investment (FDI) and
exports into foreign countries for the processed food industry (SIC-20) by estimating a
simultaneous equation system for FDI and exports. The analysis focused on key FTAA
countries that import a significant portion of U.S. processed foods–Canada, Mexico, and Brazil.
Additionally, variables that influence FDI and exports were identified. Empirical results
indicated a bi-directional complementary relationship between FDI and exports into key FTAA
countries. This implies that FDI influences exports and exports influence foreign direct
investment and that U.S. agribusinesses should use both FDI and export strategies to access key
Bolling, C., and A. Somwaru. “U.S. Foreign Direct Investment in Foreign Food Industries.”
Paper presented at the American Agricultural Economic Association Annual Meeting,
Tampa, FL, July 30-August 2, 2000.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ . “ U . S . F o o d C o m p a n i e s A c c e s s F o r e i g n M a r k e t s T h r o u g h D i r e c t I n v e s t m e n t . ”
Food Review 24,3(2001):23-28.
Carter, C.A., and A. Yilmaz. “Foreign Direct Investment (FDI) and Trade – Substitutes or
Complements? An Application to the Processed Food Industry.” Paper presented at the