www.bea.gov

Summary Estimates for Multinational Companies

Released 4/19/10

J. Steve Landefeld, DirectorApril 22, 2010

2www.bea.gov

Summary Table - U.S. Multinational Companies

2007 2008 Change

Employment (millions)

U.S. Parents 23.2 22.9 -1.3%

Foreign affiliates

10.3 10.5 1.7%

Capital expenditures ($ billions)

U.S. Parents 507.7 519.7 2.3%

Foreign affiliates

172.7 188.5 9.1%

Sales ($ billions)

U.S. Parents 9,215.5 9,509.0 3.2%

Foreign affiliates

4,978.3 5,520.2 10.9%Source: BEA

3www.bea.gov

Employment Growth Fastest Abroad

0

5

10

15

20

25

30

35

40

1989 1994 1999 2004 2007 2008

Million

s of

em

plo

yees

U.S. MNCsU.S. ParentsForeign affiliates

Source: BEA

4www.bea.gov

Falling Parent Share of MNC Employment

Source: BEA

0

10

20

30

40

50

60

70

80

1989 1994 1999 2004 2007 2008

Per

cent

5www.bea.gov

Possible Explanations

▪Resource-seeking Lower-wage labor More abundant natural resources

▪Market-seeking Liberalization in host government

policies toward direct investment Faster rates of economic growth

abroad

A shift in the location of production that is:

6www.bea.gov

Affiliates Sell Abroad What They Produce Abroad

0

10

20

30

40

50

60

70

80

1966 1977 1982 1989 1994 1999 2004 2007

Per

cent of

tot

al s

ales

United States

Local

Other ForeignCountries

Source: BEA

Destination of Sales by Foreign Affiliates

7www.bea.gov

Markets Growing Faster Abroad

0

5

10

15

20

25

30

35

40

45

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2008

Per

cent

trendline

Sources: World Bank and BEA

U.S. Share of World GDP

8www.bea.gov

Local Markets Important Where Employment is Growing

Country of affiliate Employment increase in 1989-2007

% of sales to local market

All countries +4.9 million

59%

China +676,000 72%

Mexico +613,000 68%

United Kingdom +443,000 67%

France +283,000 67%

India +266,000 77%

Canada +196,000 75%Source: BEA

9www.bea.gov

Summary Table - U.S. Affiliates of Foreign Multinational Companies

2007 2008 Change

Employment (millions) 5.6 5.5 -1.0%

Capital expenditures ($ billions) 190.2 190.7 0.3%

Sales ($ billions)

3,353.1 3,406.5 1.6%

Source: BEA

10www.bea.gov

Little Recent Growth for U.S. Affiliates

0

1

2

3

4

5

6

1997 2002 2007 2008

Employment (millions) Share of private U.S. employment (percent)

Source: BEA

Employment by U.S. Affiliates of Foreign MNCs

11www.bea.gov

Most Growth Occurred in Late 1990’s

0

50

100

150

200

250

300

350

400

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Billion

s of

(20

05) dol

lars

* Equals nominal outlays deflated by the U.S. GDP deflator; source: BEA.

Real Outlays* for New U.S. Affiliates

12www.bea.gov

But Output of U.S. Affiliates Continues to Rise

0

20

40

60

80

100

120

1997 2002 2007

Thou

sands

of (20

05) dol

lars

0

1

2

3

4

5

6

Per

cent

Real value added per employee Share of U.S. private GDP

13www.bea.gov

EU-Owned Companies Account for Most of Growth

Country of UBO Employment increase in 1997-2007

Share of increase

All countries +814,000 100%

France +148,000 18%

Sweden +81,000 10%

Italy +69,000 8%

Germany +66,000 8%

Switzerland +65,000 8%

United Kingdom +44,000 5%

UBO: Ultimate beneficial owner; Source: BEA