Top 10 Overlooked Facts About International Investment

International investment drives U.S. economic growth and job creation. The United States benefits from both inbound and outbound investments, with protection arrangements enhancing the rule of law for workers, consumers, and companies. To maintain American competitiveness, it is crucial for U.S. policymakers to uphold these principles in future legislation and trade agreements.

Here are 10 overlooked facts about international investment:

1. Investment from abroad supports millions of American jobs. U.S. subsidiaries of foreign-headquartered companies employed nearly 8 million Americans directly in 2021. For every American directly employed by an international company, investment from abroad supports an additional two to three jobs at other companies across the United States. 

2. U.S. companies invest in foreign markets to serve those markets—not as a substitute for domestic production. Overseas sales by affiliates of U.S. multinationals topped $7.3 trillion in 2021. U.S. imports of goods produced by those same affiliates accounted for about 10% of their total sales. In other words, 90% of the production of foreign affiliates of U.S. multinationals is sold outside the United States.  

3. Earnings from foreign investments help U.S. companies innovate here at home. Revenues earned abroad help underwrite U.S. multinationals’ research and development activities, 85% of which are performed in the United States. U.S. multinationals’ R&D expenditures approached $500 billion in 2022.  

4. U.S. multinational companies are overwhelmingly focused on the United States. While 95% of the world’s customers live outside the United States, 68% of these firms’ employment, 76% of their value-added, and 79% of their capital expenditures were in the United States in 2021. These shares have risen in recent years. 

5. Most U.S. investments abroad go to developed countries with high wages, high labor standards, and environmental protections. Far from a race to the bottom, U.S. companies have directed more than 75% of their investments abroad to Europe, Canada, Japan, and other high-income nations. 

6. Companies that invest abroad are great employers here at home. Not only do U.S. multinational companies employ nearly 30 million Americans, but the compensation they offer is about 20% higher than the average for the U.S. private sector. 

7. “Offshoring” is a trivial contributor to the loss of U.S. jobs. The movement of work to overseas locations accounted for less than one-half of one percent of all U.S. jobs lost in “mass layoffs” over the past few decades. (BLS has subsequently stopped collecting this data.) Almost 88% of job losses in manufacturing in recent years can be attributable to productivity growth. Meanwhile, employment in U.S. manufacturing has expanded modestly over the past decade. 

8. U.S. investments abroad move in tandem with U.S. investment and jobs growth. As Matthew Slaughter, Dean of Dartmouth’s Tuck School of Business, writes: “From 1988 to 2020, employment in foreign affiliates of U.S. multinationals rose from 4.8 million to 14 million. Over that same period, employment in U.S. parents rose from 17.7 million to 28.4 million—a slightly larger increase at home than abroad. 

9. Investing abroad makes American companies resilient. Even as the Great Recession caused the U.S. economy to shed 7 million jobs between 2007 and 2009, U.S. multinational corporations added 1.3 million American jobs. A similar dynamic held during the COVID-19-related recession as well, with U.S. multinationals retaining and even creating jobs as they kept the economy afloat. Operating in multiple markets allows businesses to diversify their risks and makes them less vulnerable to a downturn in a single market.

10. International investment is a powerful driver of U.S. exports. U.S. multinational corporations have generated about 50% of all merchandise exports over the past decade, with their foreign affiliates purchasing over one-fifth of the total, according to the U.S. Department of Commerce.

The bottom line: The benefits of inbound and outbound foreign investment are clear. The United States must continue to welcome foreign investment and trade opportunities to attract further job-creating and economy-boosting investments from abroad.

Read our white paper to learn more about the benefits of cross-border investment.

About the authors

John G. Murphy

John Murphy directs the U.S. Chamber’s advocacy relating to international trade and investment policy and regularly represents the Chamber before Congress, the administration, foreign governments, and the World Trade Organization.

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