Abstract
In changing global market power balance toward the developing world, MNCs from emerging nations grow. They do it by learning from their developed nation partners and invest heavily in the developed world in order to gain access to technology and knowledge. Developed nations compete for all FDI, regardless of its knowledge-sourcing implications, based on the assumption that FDI creates jobs. In the United States—the leader in establishing current global trade and policy platforms—that competition is at the state level. It creates winners and losers and has positive and negative results. Most literature has focused on the positive. The contribution here is on analyzing the negative results of competing to increase FDI assets. Contrary to previous findings, most recent data show that FDI negatively affects the two aspects of a state economy that politicians claim it would benefit—state GDP and unemployment.