Survey seeks to weigh level of foreign investment in New Hampshire
Plymouth State researchers seek to offer ‘fuller picture’
'Foreign investment really matters for our economy, not only at a country level but on a state level,” says Professor Chen Wu of Plymouth State University.
Plymouth State University, in collaboration with the NH Division of Economic Development, is asking domestic and foreign companies in New Hampshire to participate in a 15-minute survey that will provide insight into the extent of foreign direct investment and international trade in the state.
Led by PSU Professors Dr. Chen Wu and Dr. Roxana Wright, the Economic Globalization Report study aims to uncover distributions and concentrations of foreign investment and international trade flows within the state by county as well as across and within all industries. It will measure the contribution of globalization to New Hampshire’s economy in terms of employment creation and retention, investment promotion, export facilitation, labor condition improvement and social welfare.
“We agreed no one in New Hampshire has a really good understanding of [foreign direct investment],” said Carmen Lorentz, director of the Division of Economic Development. “We kind of have a partial picture of what foreign direct investment looks like, but we agreed it would be really interesting if we had a fuller picture, to understand the economic impact better and new opportunities.”
In addition to providing data, the Division of Economic Development helped design and distribute the survey, which can be found here. Deadline for participation is Feb. 1, 2017.
Wu said all information is confidential and will be packaged to look at a foreign country or industry rather than individual companies.
“The quality of the report will depend on the responses to the survey to some degree, so we’re really hoping businesses will take the time to answer the survey,” said Lorentz.
“We’re very interested in it because, quite frankly, we don’t have a foreign direct investment strategy,” she said. “We haven’t had the resources to do that, but a lot of other states have a foreign direct investment strategy where they have identified which foreign countries make the most sense, what are the industries they’re going to focus on, and they’ve targeted marketing campaigns to companies in those countries.”
As part of his dissertation, Wu has been examining how states use policies to attract foreign investment and measuring the impact of foreign direct investment on the local economy.
“I found foreign investment really matters for our economy, not only at a country level but on a state level,” said Wu. He noted that domestic jobs from foreign companies were stable throughout the recession, and that, on average, those positions offer 30 percent higher salaries and more benefits than their domestic partners.
More than 43,000 workers are employed by 456 foreign subsidiaries in the state.
But there’s little information at the county level, said Wu, but what he does know is that 70 percent of foreign direct investment is in Hillsborough, Rockingham and Cheshire counties, and that foreign firms tend to stick together in clusters.
He also learned that tax incentives “are not the primary concern for foreign companies.”
According to Wu, what those firms care more about “is how the state uses tax collection for public services,” said Wu, who thinks this report could be helpful for policymakers.
Wu and Wright obtained a university grant of $6,000, most of which was used to purchase database tools. They recently applied for a program under the U.S. Bureau of Economic Analysis that would grant them access to national surveys foreign companies are required to complete.
When the report is released sometime next summer, it will include a correlation index by country and industry as well as visual maps and charts to break down the information to be used for economic development agencies, chambers of commerce and others.
Wu also thinks that foreign subsidiaries themselves are interested in the report.
“They contribute to New Hampshire’s income growth and they facilitate New Hampshire exports, so they want their contributions to be recognized, and they want to know how they are doing in comparison with other foreign companies.”