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Thursday, May 17, 2012

Foreign Direct Investment in the United States: An Economic Analysis

James K. Jackson
Specialist in International Trade and Finance

Foreign direct investment in the United States declined sharply after 2000, when a record $300
billion was invested in U.S. businesses and real estate. (Note: The United States defines foreign
direct investment as the ownership or control, directly or indirectly, by one foreign person
[individual, branch, partnership, association, government, etc.] of 10% or more of the voting
securities of an incorporated U.S. business enterprise or an equivalent interest in an
unincorporated U.S. business enterprise. 15 CFR §806.15 [a][1].) In 2010, according to U.S.
Department of Commerce data, foreigners invested $236 billion in U.S. businesses and real
estate. Foreign direct investments are highly sought after by many state and local governments
that are struggling to create additional jobs in their localities. While some in Congress encourage
such investment to offset the perceived negative economic effects of U.S. firms investing abroad,
others are concerned about foreign acquisitions of U.S. firms that are considered essential to U.S.
national and economic security.

Date of Report: May 10, 2012
Number of Pages: 11
Order Number: RS21857
Price: $29.95

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