The 10 Most Overlooked Facts About International Investment
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The 10 Most Overlooked Facts About International Investment

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International investment drives U.S. economic growth.

International investment drives U.S. economic growth.

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The 10 Most Overlooked Facts About International Investment The 10 Most Overlooked Facts About International Investment Presentation Transcript

  • Top Ten Overlooked Facts About International Investment OVERLOOKED FACTS ABOUT INTERNATIONAL INVESTMENT 1
  • Top Ten Overlooked Facts About International Investment International investment drives U.S. economic growth. 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. 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. ” 1
  • Top Ten Overlooked Facts About International Investment Investment from abroad creates millions of American jobs. U.S. subsidiaries of foreign-headquartered companies employ 21 million Americans directly or indirectly, representing 12 percent of total U.S. employment. Source: Organization for International Investment (OFII), “Chain Reaction, Global Investment Works for America, May 2012. ” 2
  • Top Ten Overlooked Facts About International Investment Companies that invest abroad are great employers for American workers. Not only do U.S. multinational companies employ more than 22 million Americans, the compensation they offer is nearly 20 percent higher than the U.S. private sector average. 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. 3
  • Top Ten Overlooked Facts About International Investment Investing abroad makes American companies resilient. 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 289,000 American jobs. That trend continued in 2010. 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: BEA Press Release, April 18, 2012, Summary Estimates for Multinational Companies: Employment, Sales, and Capital Expenditure for 2010. 4
  • Top Ten Overlooked Facts About International Investment U.S. companies invest in foreign markets to serve those markets—not as a substitute for domestic production. More than 90 percent of the production of foreign affiliates of U.S. multinationals is sold abroad­ ­ ot in the United States. —n Further, a 10 percent increase in foreign capital investment triggers a 2.6 percent increase in domestic capital investment. 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. 5
  • Top Ten Overlooked Facts About International Investment International investment is a powerful driver of U.S. exports. U.S. multinational corporations generated 55 percent of all merchandise exports in 2009, with their foreign affiliates purchasing one-fifth of the total, while U.S. subsidiaries of foreign multinationals generated 21 percent of all U.S. exports. 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: Organization for International Investment (OFII), “Chain Reaction, Global Investment Works for America, May 2012. ” 6
  • Top Ten Overlooked Facts About International Investment Earnings from foreign investments help U.S. companies innovate here at home. Sales by foreign affiliates of U.S. multinationals approached $5 trillion in 2009. These revenues help underwrite their research and development activities, 84 percent of which continue to be performed 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. ” 7
  • Top Ten Overlooked Facts About International Investment U.S. multinational companies are overwhelmingly focused on the United States. While 95 percent of the world’s customers live outside the United States, more than 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. ” 8
  • Top Ten Overlooked Facts About International Investment Most U.S. investment abroad goes to developed countries with high wages and labor standards. Far from a race to the bottom, U.S. companies have directed 73 percent of their investments abroad to Europe, Canada, Japan, and other high-income nations. 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. ” 9
  • Top Ten Overlooked Facts About International Investment Investors from abroad are big buyers locally. U.S. subsidiaries of foreign multinationals buy $1.8 trillion in intermediate inputs from American companies of all sizes — representing almost 80 cents of every dollar they spend on materials and components. Source: Organization for International Investment (OFII), “Chain Reaction, Global Investment Works for America, May 2012. ” 10