The U.S. Department of Commerce released a new report highlighting the impact of foreign direct investment (FDI) on the U.S. economy. The Foreign Direct Investment in the United States: Update to 2013 Report examines recent trends in FDI and highlights newly released “greenfield” FDI data from the Department’s Bureau of Economic Analysis (BEA). The report notes that foreign direct investment trends identified in earlier reports have continued to 2015.
“This report reaffirms that America is the world's best investment destination,” said Secretary Pritzker. “Foreign direct investment in the United States reached a record $348 billion in 2015, contributing to our economic growth and demonstrating our continued global competitiveness.
The report’s findings include:
- The United States is the largest recipient of global FDI, its inward FDI stock of $2.9 trillion on a historical-cost basis in 2014. On a current-cost basis, the United States’ FDI stock was more than three times larger than that of the next largest destination country in 2014.
- Investment in the United States remains strong, total FDI stock in the United States grew an average of six percent per year from 2009-2014.
- The largest sources of FDI into the United States are advanced economies, led by the United Kingdom, Japan, and Germany.
- The U.S manufacturing sector continues to benefit greatly from inbound FDI flows, as nearly 70 percent of FDI flows in 2015, and more than one-third of jobs at U.S. majority-owned affiliates of foreign entities in 2013 were in manufacturing.
- Majority-owned U.S. affiliates of foreign entities produced $360 billion in goods exports in 2013. These firms are a catalyst for research and development in America, investing $53 billion in R&D and accounting for a record high 16.4 percent of the U.S. total expenditure on R&D by businesses.
- Majority-owned U.S. affiliates of foreign entities employed 6.1 million U.S. workers in 2013, up from 5.8 million in 2011. These firms generally provide compensation at higher levels than the U.S. average, at nearly $80,000 per U.S. employee in 2013, as compared to average earnings of $60,000 for workers in the economy as a whole.
- Newly collected data shows that “greenfield” investment expenditures by foreigners totaled $16.6 billion in 2014, with expenditures on establishing new businesses totaling $13.8 billion and expenditures on expanding existing businesses totaling $2.8 billion.
- In 2014, foreign investors spent $224.7 billion acquiring U.S. companies; therefore, total first-year expenditures by foreign entities (acquisitions plus expansions plus establishment of new businesses) were $241.3 billion.