Globalization and metropolitan well-being in the United States

Objective. Local governments increasingly seek to participate in various international transactions, encouraging export by firms within their borders, seeking foreign investment, and accommodating foreign tourists. They do so in the expectation that involvement in the global marketplace will engender economic well-being. This paper seeks to determine whether those metropolitan areas that are more enmeshed in such global transactions are in fact better off economically than metro areas that are less involved. Methods. We use OLS and robust regression techniques for a sample of 91 metropolitan areas and their central cities to determine whether levels of export, foreign tourism, foreign investment, and immigration are positively related to various measures of well-being, including job growth, income, employment, and low poverty levels. Results. We find that in certain circumstances, foreign direct investment has a slight positive effect on local well-being, while immigration appears to drive up unemployment in the short term. Other measures of global transactions, however, have only modest, if any, effects. Conclusions. Global economic activity fails to demonstrate strong effects because for most metropolitan areas, it is simply too small in proportion to the domestic economy. Expectations of the global marketplace apparently outweigh its actual benefits for urban communities.