The Effectiveness of Investment and Trade Promotion in American Cities

SUMMARY In order to take advantage of the emerging global economy and reap potential gains in local employment levels and tax revenues, city leaders must decide whether to put scarce resources in export development, foreign direct investment attraction, or both. In this study we examine the effectiveness of policies used by cities in their efforts to promote exports. We find: (1) cities prefer to pursue FDI attraction activities, and (2) there is a negative relationship between the level of city sponsored international activities and city levels of exports.