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Foreign Direct Investment in the United States

Executive Summary

When foreign companies invest in U.S. businesses, known as foreign direct investment (FDI), it not only provides jobs, but relatively high-paying jobs – indeed, up to 30% higher-paying. Encouraging more FDI and expanding the number of countries that invest in the United States would potentially lead to more economic growth and create even more new, high-paying U.S. jobs.

  • During the last ten years, majority-owned U.S. affiliates of foreign companies have employed between 5-6 million workers.
  • FDI supported 2 million manufacturing jobs, which have been less affected by the sector-wide losses in employment than domestic manufacturing jobs.
  • Workers at majority-owned U.S. affiliates of foreign companies receive 30% higher pay than non-FDI supported jobs. (See Figure 1 below.)
  • U.S. FDI totaled $194 billion in 2010, and $1.7 trillion over the last ten years.
  • FDI flows vary greatly year-to-year and generally follow the U.S. business cycle: FDI hit a low of $64 billion in 2003 and then surged to an historical peak of $328 billion in 2008.
  • At present, relatively few countries invest in the United States. In fact, 84% of FDI in the U.S. in 2010 came from or through eight countries: Switzerland, the United Kingdom, Japan, France, Germany, Luxembourg, the Netherlands, and Canada.
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