The United Kingdom received the most direct investment from the United States in 2020, an amount exceeding 890 billion U.S. dollars. This measurement was based on a historical-cost basis, meaning that the original cost of investment has been adjusted for inflation.
What is foreign direct investment?
Foreign direct investment (FDI) is the amount that foreign speculators invests in firms in another country. Investors from the United States have trillions of U.S. dollars in FDI invested abroad. This gives firms in those countries access to capital that they might not have otherwise enjoyed, particularly if the firms are in developing regions such as Africa. The United States is also a target country for FDI, with hundreds of billions of U.S. dollars flowing into the United States every year.
Benefits and risks
FDI generally increases the size of both economies. The host country has an inflow in capital, which should lead to a higher number of jobs and increased productivity. The investing company should benefit from the dividends of such investments. However, any investment has default risks. These risks are magnified by the regulatory uncertainty that arises from the fact that two legal systems are involved. This can lead to political pressure, particularly if trade tensions are already high.
Countries with highest direct investment position received from the United States in 2020
(in billion 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.
The “United Kingdom Islands, Caribbean” includes British Virgin Islands, Cayman Islands, Montserrat, and Turks and Caicos Islands.
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BEA. (September 10, 2021). Countries with highest direct investment position received from the United States in 2020 (in billion U.S. dollars, on a historical-cost basis) [Graph]. In Statista. Retrieved May 23, 2022, from https://www.statista.com/statistics/188806/top-15-countries-for-united-states-direct-investments/
BEA. "Countries with highest direct investment position received from the United States in 2020 (in billion U.S. dollars, on a historical-cost basis)." Chart. September 10, 2021. Statista. Accessed May 23, 2022. https://www.statista.com/statistics/188806/top-15-countries-for-united-states-direct-investments/
BEA. (2021). Countries with highest direct investment position received from the United States in 2020 (in billion U.S. dollars, on a historical-cost basis). Statista. Statista Inc.. Accessed: May 23, 2022. https://www.statista.com/statistics/188806/top-15-countries-for-united-states-direct-investments/
BEA. "Countries with Highest Direct Investment Position Received from The United States in 2020 (in Billion U.S. Dollars, on a Historical-cost Basis)." Statista, Statista Inc., 10 Sep 2021, https://www.statista.com/statistics/188806/top-15-countries-for-united-states-direct-investments/
BEA, Countries with highest direct investment position received from the United States in 2020 (in billion U.S. dollars, on a historical-cost basis) Statista, https://www.statista.com/statistics/188806/top-15-countries-for-united-states-direct-investments/ (last visited May 23, 2022)
