The following study assesses economic and political determinants of foreign direct investment by U.S. firms. Data from the Bureau of Economic Analysis at the U.S. Department of Commerce was used for total and food sector FDI for 35 countries from the years 2001-2008. Using these data in three econometric models, the paper examines the effect on FDI of regional trade blocs as well as political factors such as labor and credit market regulations, and transfers and subsidies. Finally, the thesis provides a comparison of each model on two dependent variables: food sector and total FDI. The study finds that management decision making for FDI differs for agribusiness firms compared to industry as a whole, especially with regards to the host country’s relative wages, language barriers, and membership in the Association of Southeast Asian Countries (ASEAN)
