McMillan 2
States seek to better their economies by creating jobs through foreign direct investment
(FDI) and foreign-owned firms directly employ more than 6.4 million workers in the U.S.
(Grzeskowiak 2005, 22). Although state politics literature looks at economic development
issues, FDI is rarely examined on its own. Governors are now recognized as chief economic
ambassadors (National Governors Association 2002), but studies have not considered governors’
power relative to their international and economic roles—leading missions promoting trade and
seeking investment, establishing international offices, and signing memoranda of understanding
with other subnational actors.
States are increasingly engaged internationally—spending “$190
million on international programs (excluding investment incentives) in 2002, up from $20
million in 1982” (Whatley 2003, vi). In 2004, states had 224 offices, compared to four in 1980,
and state legislatures “passed 270 bills or resolutions on international topics in the 2001-2002
legislative session, up from 72 in 1991-1992” (State International Development Organizations
(SIDO) 2004; Whatley 2003, vi).
State officials “consistently list the desire to create or protect jobs as the primary
motivation for international programs,” making international trade and investment the “largest
category of state international engagement” (Whatley 2003, 3-4, 6). This project seeks to better
understand those strategies used to attract FDI. By examining overseas investment, this study
eliminates the concerns of those who argue there is “little or no positive effect on the national
economy” if investment moves from one state to another (Watson 1995, 5-6; see Accordino
1
This study employs Peter Eisinger’s (1988) definition of economic development policy as “those efforts by
government to encourage new business investment in particular locales in the hopes of directly creating or retaining
jobs, setting into motion the secondary employment multiplier, and enhancing and diversifying the tax base” (3-4).
2
Although governors conduct overseas missions to recruit investment and/or promote state exports, these trips are
typically called “trade missions” by practitioners, journalists and scholars. This paper uses “trade missions” and
“investment missions” interchangeably to refer to governor-led missions abroad. The terms “international office”
and “overseas office” are also used interchangeably.
3
Factors explaining states’ variation in international legislative activity include “the degree of state involvement in
the international economy, as measured by the level of state exports, and party control of the legislature” (Conlan,
Dudley and Clark 2004, 183).
Convention