Direct U.S. Investment in Israeli Manufacturing: the Sectoral and Spatial Components

  • Roger Mark Selya University of Cincinnati
Keywords: Foreign Investment, United States Investment in Israel, Israeli Manufacturing

Abstract

Direct U.S. investment in Israel stands out as an anomaly in the Middle East as it consists mainly of investments in manufacturing. Such investments are attributed to the locational and infrastructural advantages of Israel, as well as the Israeli government's having created a legal and financial environment conducive to foreign investment. Specific industries to attract investment include electrical and electronics, chemicals, pharmaceuticals, precision instruments, and metals. The choices in part reflect the availability of native Israeli research and development capacity. The spatial distribution of the investments is concentrated in Tel Aviv and Haifa, although some spread to other areas as seen, albeit not at the rate of native investments. Such investments have contributed to higher employment and exports; data are not available to measure whether or not other theoretical advantages have been realized.

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Published
2016-02-10