Is there a connection between foreign direct investment (FDI) and exports?
FDI and trade are very closely related. In fact, many foreign firms with operations in the United States have invested to service our domestic market, but also to use our nation as an export platform. As of 2007, over 19 percent, or nearly $228 billion of all U.S. exports were generated by U.S. subsidiaries of foreign firms. Not only does FDI augment the amount of American exports, it also increases employment. FDI has a multiplier effect of creating additional jobs beyond the workers employed directly by the foreign company. FDI increases exports, creates employment and helps grow the American economy.
