In 2022, foreign direct investment (FDI) from the United States to other countries amounted to 6.58 trillion U.S. dollars. Foreign direct investment reflects the ownership of business from one country in another country. It differs from a traditional investment in companies located abroad by the ownership factor in case of FDI.
Why is FDI important?
FDI has influences in the both the sending and receiving countries. In the recipient countries, FDI can be an important source of capital that might not otherwise be available. This is particularly true in less developed regions, such as in Africa. The countries which received the largest amount of foreign direct investment from the United States in 2019 were the Netherlands, the United Kingdom and Luxembourg.
FDI flows to the United States
On the other hand, the countries that sent the most FDI to the United States in 2017 were Japan, the United Kingdom and Canada. There were about 8.7 million jobs offered in the U.S. due to foreign direct investments as of 2019.
Foreign direct investment position of the United States abroad from 2000 to 2022
(in trillion U.S. dollars, on a historical-cost basis)
In accounting, historical cost is the original monetary value of an economic item. Historical cost is based on the stable measuring unit assumption. In some circumstances, assets and liabilities may be shown at their historical cost, as if there had been no change in value since the date of acquisition.
U.S. direct investment abroad is defined as ownership by a U.S. investor of at least 10 percent of a foreign business. The direct investor is known as a U.S. parent, and the U.S.-owned foreign business is known as a foreign affiliate. International transactions statistics cover the foreign affiliates’ transactions with their U.S. parents, so these statistics focus on the U.S. parent’s share, or interest, in its affiliates rather than on the affiliates’ overall size or level of operations. The major items include capital flows, which measure the funds that U.S. parents provide to their foreign affiliates, and income, which measures the return on those funds. Direct investment position statistics are stocks and are cumulative; they measure the total outstanding level of U.S. direct investment abroad at year end.
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BEA. (July 20, 2023). Foreign direct investment position of the United States abroad from 2000 to 2022 (in trillion U.S. dollars, on a historical-cost basis) [Graph]. In Statista. Retrieved November 21, 2024, from https://www.statista.com/statistics/188571/united-states-direct-investments-abroad-since-2000/
BEA. "Foreign direct investment position of the United States abroad from 2000 to 2022 (in trillion U.S. dollars, on a historical-cost basis)." Chart. July 20, 2023. Statista. Accessed November 21, 2024. https://www.statista.com/statistics/188571/united-states-direct-investments-abroad-since-2000/
BEA. (2023). Foreign direct investment position of the United States abroad from 2000 to 2022 (in trillion U.S. dollars, on a historical-cost basis). Statista. Statista Inc.. Accessed: November 21, 2024. https://www.statista.com/statistics/188571/united-states-direct-investments-abroad-since-2000/
BEA. "Foreign Direct Investment Position of The United States Abroad from 2000 to 2022 (in Trillion U.S. Dollars, on a Historical-cost Basis)." Statista, Statista Inc., 20 Jul 2023, https://www.statista.com/statistics/188571/united-states-direct-investments-abroad-since-2000/
BEA, Foreign direct investment position of the United States abroad from 2000 to 2022 (in trillion U.S. dollars, on a historical-cost basis) Statista, https://www.statista.com/statistics/188571/united-states-direct-investments-abroad-since-2000/ (last visited November 21, 2024)
Foreign direct investment position of the United States abroad from 2000 to 2022 (in trillion U.S. dollars, on a historical-cost basis) [Graph], BEA, July 20, 2023. [Online]. Available: https://www.statista.com/statistics/188571/united-states-direct-investments-abroad-since-2000/