February 2, 2001
News Release 01-014
MULTINATIONAL CORPORATIONS AND THEIR AFFILIATES
INCREASINGLY SHAPE GLOBAL COMMERCE
Rapid growth in international direct investment flows has made affiliate transactions, rather than
traditional cross-border trade, the principal mode of delivering goods and services across borders,
according to a new U.S. International Trade Commission (ITC) staff research study.
The publication, Examination of U.S. Inbound and Outbound Direct Investment, examines the
nature and extent of U.S. inbound and outbound direct investment, both by country and by
ITC staff research studies are generated by ITC staff and do not reflect the views of the U.S.
International Trade Commission or of any individual Commissioner. Highlights of the study
- Sales by U.S.-owned foreign affiliates totaled $2 trillion in 1997, more than double the total
amount of U.S. cross-border exports. Sales by foreign-owned U.S. affiliates totaled
$1.7 trillion, 65 percent larger than the total amount of U.S. cross-border imports.
- Total outbound investment stock in 1998 was $981 billion, with total 1998 investment
outflows of $110 billion. Total inbound investment stock was $812 billion in 1998, with
investment inflows of $109 billion.
- The United Kingdom is the largest destination for U.S. direct investment abroad, followed by
Canada and the Netherlands. Brazil is the largest developing country recipient of U.S. direct
investment. The United Kingdom is the largest foreign investor in the United States, followed
- Service industries account for 59 percent of outbound U.S. investment stock. The largest
industries are financial services, chemicals manufacturing, and petroleum. The majority of
inbound U.S. investment stock is also directed to the service sector. The industries accounting
for the greatest shares of inbound investment are chemicals manufacturing, wholesale trade,
- Foreign affiliates of U.S. multinational corporations employed 8 million workers around the
world in 1997, 57 percent of them in manufacturing industries. U.S. affiliates of foreign
multinational corporations employed 5.2 million U.S. workers in 1997, accounting for
4.8 percent of total U.S. private sector employment.
- The states of California, Texas, and New York have attracted the greatest amount of foreign
direct investment in the United States, together accounting for approximately 25 percent of
total employment and physical assets. Hawaii, South Carolina, and North Carolina are the
states with the largest percentage of workers employed by foreign-owned U.S. affiliates.
Examination of U.S. Inbound and Outbound Direct Investment (SRS-26, USITC Publication
3383, January 2001) will be posted in the Publications and Reports area of the ITC Internet site at
www.usitc.gov. A printed copy may be requested by calling 202-205-1809 or by writing the Office
of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC,
20436. Requests may also be made by fax to 202-205-2104.
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