The determinants of foreign direct investment in U.S. real estate : an empirical analysis
Author(s)Liang, Min, S.M. Massachusetts Institute of Technology; Yoon, Sunghoon
Massachusetts Institute of Technology. Center for Real Estate. Program in Real Estate Development.
William C. Wheaton.
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This thesis provides an empirical analysis of the determinants of foreign direct investment in commercial real estate (FDIRE) in the U.S. We examine the major factors that affect levels of FDIRE in the U.S. and foreign investors' location preferences. First, using panel data from 2002 to 2006, this research develops a model to test the importance of GDP, GDP growth, national investment level, exchange rate, and interest rate in determining levels of FDIRE in the U.S. from major developed countries. Results of the study suggest that economic growth of a country unexpectedly encourages domestic investment rather than foreign investment, and depreciation of currency value of the host country attracts more FDIRE. Second, the study analyzes the spatial distribution of FDIRE at the state level for the time period 1999 to 2007. A set of location determinants is selected to explain the pattern of FDIRE. These determinants include size of population, personal income, commercial real estate vacancy rate, commercial real estate completion rate, population growth, and personal income growth. Results of the study suggest that foreign investors prefer larger and wealthier states for direct commercial real estate investment. There is also evidence showing that foreign investors begin to diversify toward less populous and less wealthy states.
Thesis (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Program in Real Estate Development in Conjunction with the Center for Real Estate, 2011.This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections."September 2011." Cataloged from student-submitted PDF version of thesis.Includes bibliographical references (p. 51-52).
DepartmentMassachusetts Institute of Technology. Center for Real Estate. Program in Real Estate Development.
Massachusetts Institute of Technology
Center for Real Estate. Program in Real Estate Development.