International Journal of Humanities and Social Science

ISSN 2220-8488 (Print), 2221-0989 (Online) 10.30845/ijhss

A Consideration of the Unpredictable Determinants of American State Government IFDI Solicitation

In recent years, greater regulatory responsibility in several lawmaking areas in America has moved from the federal government to state government (Altshuler & Luberoff, 2003). As a result, a new phenomenon known as devolution revolution has emerged in which American state governments have established or reestablished themselves as powerful entities, capable of spending more time and effort on specific regulations and policymaking (Gerber & Teske, 2000). Donovan, Moody, and Smith (2009) indicated that local and state governments currently have a greater impact today on the daily lives of Americans than the federal government. Economic development is now one of those policy arenas that states now have more powers (Sapat, 2004). Because of the augmented necessity to build trust in global relationships and the necessity to create proactive leadership, a newfound competitiveness between American states in attracting international industry investment has formed. These factors have caused state incentives and marketing efforts to become more complex than the standard tax breaks that were initially offered up in the 1980s. The increased worldwide Incoming Foreign Direct Investment (IFDI) flows in recent decades have prompted scholars to research the determinants of capital movements into America, particularly new streams from Eastern Europe and Eastern Asia.

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