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EMBARGOED UNTIL RELEASE AT 8:30 a.m. EDT, Friday, August 18, 2023

BEA 23–37

Activities of U.S. Affiliates of Foreign Multinational Enterprises, 2021

Majority-owned U.S. affiliates of foreign multinational enterprises employed 7.94 million workers in the United States in 2021, a 2.9 percent increase from 7.71 million workers in 2020, according to statistics on U.S. affiliate operations and finances released today by the U.S. Bureau of Economic Analysis (BEA).

Majority-owned U.S. affiliates accounted for 6.2 percent of total private-industry employment in the United States in 2021, down slightly from 6.3 percent in 2020 (chart 1). By industry, employment was largest in manufacturing and in retail trade (table 1). Majority-owned U.S. affiliates with ultimate owners in the United Kingdom, Japan, and Germany were the largest contributors to employment (table 2).

Chart 1. Employment by Majority-Owned U.S. Affiliates

Current-dollar value added of majority-owned U.S. affiliates, a measure of their direct contribution to U.S. gross domestic product, increased 12.6 percent to $1.2 trillion in 2021. These affiliates accounted for 6.50 percent of total U.S. business-sector value added, down slightly from 6.52 percent in 2020.

Expenditures for property, plant, and equipment by majority-owned U.S. affiliates increased 5.0 percent to $290.8 billion. These affiliates accounted for 17.3 percent of total U.S. private business capital expenditures. Research and development (R&D) performed by majority-owned U.S. affiliates increased 9.4 percent to $78.3 billion. These affiliates accounted for 13.3 percent of total U.S. business R&D in 2020, the latest year for which all-U.S. business R&D data are available.

Chart 2. Majority-Owned U.S. Affiliates Share of Private-Industry Employment by State

By state (chart 2 and table 4), private-industry employment accounted for by majority-owned U.S. affiliates was highest in South Carolina (9.5 percent), Michigan (8.8 percent), and New Hampshire (8.7 percent). In all three states, majority-owned U.S. affiliates in the manufacturing sector employed the most workers (table 3).

Additional statistics on the activities of U.S. affiliates of foreign multinationals including sales, balance sheet and income statement items, compensation of employees, trade, and more are available on BEA's website. More industry-, country-, and state-level detail are available on the website and will be highlighted in September in the Survey of Current Business.

Updates to the statistics

Statistics for 2020 are revised to incorporate newly available and revised source data (table A). Preliminary statistics for 2020 were released in August 2022 and highlighted in "Activities of U.S. Affiliates of Foreign Multinational Enterprises in 2020" in the September 2022 Survey.

**Table A. Updates to Statistics on 2020 Activities of U.S. Affiliates of Foreign Multinational Enterprises** [Billions of dollars, except as noted]
	Preliminary estimate	Revised estimate
Number of employees (thousands)	7,858.1	7,714.0
Value added	1,058.3	1,031.3
Expenditures for property, plant, and equipment	281.8	276.8
Research and development expenditures	71.4	71.6
U.S. Bureau of Economic Analysis

Next release: November 2024
Activities of U.S. Affiliates of Foreign Multinational Enterprises, 2022

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Technical

Kirsten Brew

(301) 278-9152

Kirsten.Brew@bea.gov

Technical

Michelle Proctor

301-278-9293

Michelle.Proctor@bea.gov

Media

Connie O’Connell

301-278-9003

Connie.OConnell@bea.gov

Resources

Stay informed about BEA developments by reading The BEA Wire, signing up for BEA’s email subscription service, or following @BEA_News on X, formerly known as Twitter.
Historical time series for these estimates can be accessed in BEA’s Interactive Data Application.
Access BEA data by registering for BEA’s Data Application Programming Interface.
For upcoming economic indicators, see BEA’s news release schedule.
More information on the activities of U.S. affiliates of foreign multinational enterprises (MNEs) will be provided in September in the Survey of Current Business.
More statistics on the activities of U.S. affiliates of foreign MNEs, including more detail by industry and country, are available on the BEA website.
More information on the statistics on activities of U.S. affiliates of foreign MNEs is provided in U.S. International Economic Accounts: Concepts and Methods.
BEA also publishes a companion series on the activities of U.S. MNEs. Data for 2021 will be released November 17, 2023.

Definitions

A U.S. affiliate is a U.S. business enterprise in which there is foreign direct investment—that is, in which a foreign parent owns 10 percent or more of the U.S. business enterprise.

A majority-owned U.S. affiliate is a U.S. affiliate in which the combined ownership of all foreign parents, either directly or indirectly, exceeds 50 percent.

A foreign parent is the first person (in the broad legal sense to include any individual, partnership, corporation, or other form of organization), resident outside the United States, that has a direct investment interest in the affiliate.

The ultimate owner, also referred to as ultimate beneficial owner (UBO), is that person, proceeding up a chain of majority ownership (where the entity above owns more than 50 percent of the entity below), beginning with and including the foreign parent, that is not owned more than 50 percent by another person. Unlike the foreign parent, the UBO of an affiliate may be located in the United States.

Employment covers the total number of full-time and part-time employees on the payroll at the end of the U.S. affiliate’s fiscal year.

Value added is the value of the final goods and services produced by a firm's labor and property. Value added represents the firm's contribution to gross domestic product. The estimates of value added in this release were prepared by summing cost and profit data collected in BEA's surveys of foreign direct investment in the United States and are conceptually consistent with BEA's estimates of U.S. value added by industry.

Expenditures for property, plant, and equipment cover total expenditures for land and depreciable structures and equipment; they are gross of any sales, retirements, or transfers of previously owned tangible assets.

Research and development (R&D) performed includes expenditures for R&D performed by the U.S. affiliate, whether the R&D was for their own use or for use by others, irrespective of the source of funding.

Statistical conventions

The statistics on the activities of U.S. affiliates of foreign MNEs are based primarily on data reported in the Annual and Benchmark Surveys of Foreign Direct Investment in the United States conducted by BEA. The statistics provide information on the operations and finances of U.S affiliates and cover the entire operations of the affiliate, irrespective of the percentage of foreign ownership.

Majority-owned U.S. affiliate shares of domestic activity are provided in this news release for employment, value added, R&D performed, and expenditures for property, plant, and equipment. These shares are computed by dividing majority-owned U.S. affiliate activity levels by measures of domestic activity from other data sets that are approximately comparable. The majority-owned U.S. affiliate measures include activities in Puerto Rico and other U.S. territories; these activities are excluded in the corresponding domestic measures. For the employment share presented in this news release, majority-owned U.S. affiliate data on employment in Puerto Rico and other U.S. territories are excluded to improve comparability. The domestic totals used to compute shares are detailed below:

Employment statistics for all U.S. private industries come from line 3 (private industries) of National Income and Product Accounts (NIPA) table 6.4D "Full-Time and Part-Time Employees by Industry." Statistics for state-level shares come from BEA's Regional Economic Accounts in "private nonfarm wage and salary employment" minus "private households" from the table "Full-Time and Part-Time Wage and Salary Employment by Industry" (SAEMP27).
Statistics on value added for all U.S. businesses come from line 2 ("business-sector value added") of NIPA table 1.3.5 "Gross Value Added by Sector."
Statistics on business R&D performed in the United States come from the National Science Foundation.
Statistics on U.S. private business capital expenditures come from the U.S. Census Bureau Annual Capital Expenditures Survey.

Related statistics

Statistics on the activities of U.S. affiliates of foreign MNEs are one part of a broader set of U.S. International Economic Accounts that, taken together, provide a comprehensive, integrated, and detailed picture of U.S. international economic activities.

Statistics on direct investment and multinational enterprises include annual statistics on the activities of U.S. MNEs, detailed annual and quarterly statistics on direct investment, and annual statistics on new foreign direct investment in the United States.

Statistics on international services, released annually, include detailed annual information on trade in services and on services supplied through the channel of direct investment by affiliates of MNEs.

The International Investment Position (IIP) Accounts are released quarterly. The IIP is a statistical balance sheet that presents the dollar value of U.S. financial assets and liabilities with respect to foreign residents at a specific point in time.

The International Transactions Accounts (ITAs) are released quarterly. The ITAs are a statistical summary of economic activity between U.S. residents and the residents of other countries.

U.S. international trade in goods and services, released by BEA and the U.S. Census Bureau, provides monthly statistics on trade in goods and services.