American Economy Reaps the Benefits of Foreign Investments
November 19, 2013
Several weeks ago, President Barack Obama touted the benefits of foreign companies investing in U.S. businesses, declaring that the U.S. is "open for business." A new study shows that foreign companies that have made investments in the United States have had an "outsized impact" on the American economy. The decade-long study examined large, multinational businesses that have succeeded in their home markets and are investing in the U.S. These "insourcing companies" represent some of the most recognizable brands in the world. Conducted by The Organization for International Investment (OFII), a trade association representing 170 subsidiaries of such foreign companies as Sony, Nestle, Volvo, Michelin, and Siemens, the study shows:
- While they represent about 0.5 percent of all companies in the U.S., foreign-owned companies produce 20 percent of U.S. exports and pay nearly 14 percent of all U.S. corporate taxes.
- Over the past decade, insourcing companies increased their contribution to U.S. GDP by 25.2 percent -- nearly double the U.S. private sector's 14.3 percent increase.
- Approximately 84 percent of all foreign companies have entered the U.S. through mergers and acquisitions of U.S. companies over the past decade.
- Insourcing companies increased their research and development spending at a much faster rate than the U.S. private sector -- 31.5 percent compared to 15.5 percent.