The US Congressional Research Service just came out with an analysis of foreign investment in the US.

A few interesting points from the report

1.  Investment is healthy but down from the peak

Investment in the US had fallen from the peak in 2000, declined again in 2008, and now is close to 2008 levels again.

2.  The stock of investment in the US is dominated by rich countries. 

The lead investors are the UK, Japan, the Dutch, Germans, Swiss….  95% of this stock is from developed countries.

3.  About a third of investment is in manufacturing, followed by banking and finance. 

This is a larger share than domestic investment, but lots of FDI is outside of manufacturing.  If the US had looser rules on investing in banking, airlines, etc I think this ratio would be even lower.

4.  Existing investors provide most of the “new” investments.

The majority of “foreign investment” in the US actually comes from the retained earnings of foreign multinationals. 82% of US inward investment came from investors already in the US.

5.  MNCs are capital intensive, employing few workers

US affiliates of foreign firms employ 6 million Americans, which is less than 4% of the US employment force.  These are real numbers, but they far from dominate employment statistics.  But the average salary is $76,000, indicating hiring higher skilled workers.

Quick Thoughts

I teach a politics of multinational corporations class and this pretty much fits the general pattern in the developed world.  The one exception is that developing countries are becoming more active in foreign investment, yet the US has seen little of this.  This could be because some of the higher profile investments (CNOCC, Dubai ports, Ralls Corporation, Huawei and ZTE, etc) have been blocked for national security reasons.