New England's Links to the World Economy
"Openness" to international trade and investment encourages technology transfer and productivity growth. It may also provide a degree of stability in the face of national and regional business cycles. To assess New England's relative openness, this article surveys New England's links with the world economy: its trade in goods and services, its banking ties, its inbound and (to the extent possible) its outbound foreign direct investments.
The author finds evidence that New England's 1987-89 export growth has been slow, and that inbound foreign investment recently has played a below-average role in the regional economy, especially in the manufacturing sector. She suggests that the decline in the region's manufacturing may be adversely affecting its international trade and investment ties. New England remains one of the most open regions in the country, however, and opportunities abound for further expansion of its export activities.