The 10 Most Overlooked Facts About International Investment

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Updated: March 2016
International investment drives U.S. economic growth.

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The 10 Most Overlooked Facts About International Investment

  1. 1. Top Ten Overlooked Facts About International Investment 1 OVERLOOKED INTERNATIONAL INVESTMENT FACTS ABOUT
  2. 2. Top Ten Overlooked Facts About International Investment 2 International investment drives U.S. economic growth. Source: Matthew J. Slaughter, U.S. Council for International Business and Business Roundtable, How U.S. Multinational Companies Strengthen the U.S. Economy, March 2010. Source: Organization for International Investment (OFII), “Chain Reaction, Global Investment Works for America,” May 2012. U.S.multinationals’investments abroad serve as the gateway to the global economy for American small and medium sized businesses as they purchase 90 percent of their intermediate inputs from other U.S.companies. Meanwhile,U.S.subsidiaries of foreign multinationals invest nearly $100 billion annually in their U.S.operations.
  3. 3. Top Ten Overlooked Facts About International Investment 3 Source: Organization for International Investment (OFII), “Chain Reaction, Global Investment Works for America,” May 2012. U.S.subsidiaries of foreign-headquartered companies employ 21 millionAmericans directly or indirectly,representing 12 percent of total U.S.employment. Investment from abroad creates millions of American jobs.
  4. 4. Top Ten Overlooked Facts About International Investment 4 Companies that invest abroad are great employers for American workers. Source: Matthew J. Slaughter, U.S. Council for International Business and Business Roundtable, How U.S. Multinational Companies Strengthen the U.S. Economy, March 2010. Not only do U.S.multinational companies employ more than 23 millionAmericans,the compensation they offer is nearly 20 percent higher than the U.S.private sector average.
  5. 5. Top Ten Overlooked Facts About International Investment 5 Investing abroad makes American companies resilient. Source: Bureau of Economic Analysis, U.S. Department of Commerce. Even as the sharpest recession in a generation caused the U.S.economy to shed eight million jobs between 2007 and 2009,U.S.multinational corporations added a net 289,000American jobs. They added 2 million more U.S.jobs between 2009 and 2013.
  6. 6. Top Ten Overlooked Facts About International Investment 6 Source: Kevin B. Barefoot and Raymond J. Mataloni Jr., Bureau of Economic Analysis, U.S. Department of Commerce, “Operations of U.S. Multinational Companies in the United States and Abroad: Preliminary Results From the 2009 Benchmark Survey,” November 2011. Source: Mihir A. Desai, C. Fritz Foley, James R. Hines Jr., “Domestic Effects of the Foreign Activities of U.S. Multinationals,” May 2008. More than 90 percent of the production of foreign affiliates of U.S.multinationals is sold abroad­—­not in the United States. Further,a 10 percent increase in foreign capital investment triggers a 2.6 percent increase in domestic capital investment. U.S. companies invest in foreign markets to serve those markets—not as a substitute for domestic production.
  7. 7. Top Ten Overlooked Facts About International Investment 7 International investment is a powerful driver of U.S. exports. Source: Matthew J. Slaughter, U.S. Council for International Business and Business Roundtable, How U.S. Multinational Companies Strengthen the U.S. Economy, March 2010. U.S.multinational corporations generate nearly half of all merchandise exports,with their foreign affiliates purchasing one-fifth of the total, while U.S.subsidiaries of foreign multinationals generate more than 20 percent of all U.S.exports.
  8. 8. Top Ten Overlooked Facts About International Investment 8 Earnings from foreign investments help U.S. companies innovate here at home. Source: Bureau of Economic Analysis, U.S. Department of Commerce. Sales by foreign affiliates of U.S. multinationals topped $7 trillion in 2013.These revenues help underwrite their research and development activities, 84 percent of which continue to be performed in the United States.
  9. 9. Top Ten Overlooked Facts About International Investment 9 While 95 percent of the world’s customers live outside the United States, two-thirds of these firms’ employment, value-added, and capital expenditures are in the United States. Source: Kevin B. Barefoot and Raymond J. Mataloni Jr., Bureau of Economic Analysis, U.S. Department of Commerce, “Operations of U.S. Multinational Companies in the United States and Abroad: Preliminary Results From the 2009 Benchmark Survey,” November 2011. U.S.multinational companies are overwhelmingly focused on the United States.
  10. 10. Top Ten Overlooked Facts About International Investment 10 Most U.S. investment abroad goes to developed countries with high wages and labor standards. Source: Kevin B. Barefoot and Raymond J. Mataloni Jr., Bureau of Economic Analysis, U.S. Department of Commerce, “Operations of U.S. Multinational Companies in the United States and Abroad: Preliminary Results From the 2009 Benchmark Survey,” November 2011. Far from a race to the bottom,U.S.companies have directed 75 percent of their investments abroad to Europe, Canada, Japan, and other high-income nations.
  11. 11. Top Ten Overlooked Facts About International Investment 11 Source: Organization for International Investment (OFII), “Chain Reaction, Global Investment Works for America,” May 2012. U.S.subsidiaries of foreign multinationals buy $1.8 trillion in intermediate inputs fromAmerican companies of all sizes — representing almost 80 cents of every dollar they spend on materials and components. Investors from abroad are big buyers locally.
  12. 12. Top Ten Overlooked Facts About International Investment 12 U.S. Chamber of Commerce 1615 H Street, NW | Washington, DC 20062-2000 www.uschamber.com

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