Project Team

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Sandra Corredor

Co-Principal Investigator

University of Illinois at Urbana-Champaign

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Dongin Kim

Doctoral Researcher

University of Connecticut

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Mingyang Li

Postdoctoral Researcher

University of Connecticut

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Sandro Steinbach

Principal Investigator

University of Connecticut

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The Impact of Foreign Direct Investment on Agriculture in the United States

This project aims at measuring the impact of foreign direct investment on agriculture in the United States. These investment activities are vital for the agricultural and food industry as they ensure economic growth and prosperity, create highly-compensated jobs, spur innovation, and drive international trade. However, so far, we know little about the impact of these investment activities on firm performance and spillover effects on domestic firms. Therefore, this project will develop a framework to precisely measure the impact of foreign direct investment on firms operating in the agricultural and food industry. We will accomplish this task by compiling a novel dataset on investment activities and linking this data to detailed productivity and efficiency measures collected at the firm level. By exploiting changes in investment activities over time and across industries, we disentangle the effect of foreign ownership on firm performance. The analysis will enable us to not only measure the impact on foreign subsidiaries but also to investigate spillover effects on domestic firms. Therefore, our project will enhance the understanding of a highly relevant policy issue that has been so far largely neglected in the empirical literature on foreign trade and investment while being of vital importance for the future of agriculture in the United States. Such understanding provides the foundation for fact-based public discussions and allows for informed decisions. Consequently, this project enhances market efficiency and performance by providing essential knowledge on the functioning of markets in light of changing trade and investment environments.

This work is supported by the Agriculture and Food Research Initiative (Award Number 2020-67024-30964) and by the Hatch Program (Project Number CONS1025)  from the National Institute of Food and Agriculture.