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EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, FRIDAY, AUGUST 21, 2020

BEA 20-40

Activities of U.S. Multinational Enterprises, 2018

Worldwide employment by U.S. multinational enterprises (MNEs) increased 1.4 percent to 43.0 million workers in 2018 from 42.4 million in 2017, according to statistics released by the Bureau of Economic Analysis on the operations and finances of U.S. parent companies and their foreign affiliates.

Employment in the United States by U.S. parents increased 2.1 percent to 28.6 million workers in 2018. U.S. parents accounted for 66.5 percent of worldwide employment by U.S. MNEs, up from 66.1 percent in 2017. Employment abroad by majority-owned foreign affiliates (MOFAs) of U.S. MNEs was nearly unchanged at 14.4 million workers and accounted for 33.5 percent of employment by U.S. MNEs worldwide.

U.S. parents accounted for 22.0 percent of total private industry employment in the United States. Employment by U.S. parents was largest in manufacturing and retail trade. Employment abroad by MOFAs was largest in China, the United Kingdom, Mexico, India, and Canada.

Worldwide current-dollar value added of U.S. MNEs increased 6.8 percent to $5.7 trillion. Value added by U.S. parents, a measure of their direct contribution to U.S. gross domestic product, increased 7.8 percent to $4.2 trillion, representing 23.3 percent of total U.S. private-industry value added. MOFA value added increased 4.1 percent to $1.5 trillion. Value added by MOFAs was largest in the United Kingdom, Canada, and Ireland.

Worldwide expenditures for property, plant, and equipment of U.S. MNEs increased 6.6 percent to $912.1 billion. Expenditures by U.S. parents accounted for $721.6 billion and MOFA expenditures for $190.4 billion.

Worldwide research and development expenditures of U.S. MNEs increased 6.9 percent to $381.4 billion. U.S. parents accounted for expenditures of $323.1 billion and MOFAs for $58.2 billion.

Additional statistics on the activities of U.S. parent companies and their foreign affiliates including sales, balance sheet and income statement items, compensation of employees, trade in goods, and more are available on BEA’s website. More industry detail for U.S. parents and more industry and country detail for foreign affiliates are also available on the website.

U.S. MNE Activities in the First Year After the Tax Cuts and Jobs Act (TCJA)

The TCJA generally eliminated taxes on dividends, or repatriated earnings, to U.S. multinationals from their foreign affiliates and changed the nominal U.S. domestic corporate tax rate from 35 percent to 21 percent beginning on January 1, 2018. BEA’s statistics cannot separate the effects of the TCJA from other prevalent economic conditions and company-specific factors in 2018, however, the statistics on the Activities of U.S. MNEs for 2018 in this release provide a first look at U.S. MNE activities in the year after the TCJA took effect.

U.S. parents grew faster than MOFAs in 2018 for several measures of their activities, including employment, value added, expenditures for property, plant, and equipment (PP&E), and research and development expenditures (R&D). This contrasts with the long-term trend of MOFA activities growth outpacing that of U.S. parents. In 2018, U.S. parents experienced above-average growth rates for these measures, while MOFAs grew at below-average rates.

Annual Percent Change in Activities of U.S. MNEs

U.S. Parents 2018 — U.S. Bureau of Economic Analysis
*1998-2018, rates for benchmark years (1999, 2004, 2009, and 2014) not included

MOFAs 2018 — U.S. Bureau of Economic Analysis
*1998-2018, rates for benchmark years (1999, 2004, 2009, and 2014) not included

In addition to the measures of MNE activities featured in this release, BEA’s U.S. MNE statistics include U.S. income taxes paid by U.S. parents. According to the statistics, U.S. income taxes paid by U.S. parents decreased 6.4 percent to $218.9 billion in 2018 (see Table I. P1). The effective U.S. income tax rate paid by U.S. parents decreased to 13.1 percent in 2018, following an effective rate of 15.4 percent in 2017 and between 18.4 and 22.3 percent for the five previous years.

Updates to the statistics

Statistics for 2017 are revised to incorporate newly available and revised source data. Preliminary statistics for 2017 were released in August 2019 and highlighted in “Activities of U.S. Multinational Enterprises in 2017” in the September 2019 issue of the Survey of Current Business.

Updates to Statistics on 2017 Activities of U.S. Multinational Enterprises Billions of dollars, except as noted
	U.S. Parents		MOFAs
	Preliminary estimate	Revised estimate	Preliminary estimate	Revised estimate
Number of employees (thousands)	28,071.2	27,981.7	14,399.9	14,381.7
Value added	3,902.5	3,901.8	1,418.4	1,416.4
Expenditures for property, plant, and equipment	653.6	666.2	199.6	189.6
Research and development expenditures	298.3	299.0	56.6	57.8

Next release: November 2021
Activities of U.S. Multinational Enterprises, 2019

Full Release & Tables (PDF)

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Technical

Ryan Noonan

(301) 278-9131

Ryan.Noonan@bea.gov

Media

Thomas Dail

301-278-9003

Thomas.Dail@bea.gov

Resources

Stay informed about BEA developments by reading the BEA blog, signing up for BEA's email subscription service, or following BEA on Twitter @BEA_News.
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 (API).
BEA's news release schedule.
More information on these statistics on the activities of U.S. MNEs will be provided in the September issue of the Survey of Current Business.
More statistics on the activities of U.S. MNEs, including more detail by industry and country, are available on the BEA website.
More information on the statistics on activities of U.S. MNEs is provided in U.S. International Economic Accounts: Concepts and Methods.
BEA also publishes a companion series on the activities of U.S. affiliates of foreign MNEs. Data for 2018 will be released November 13, 2020.
Detailed microdata from the surveys are available to researchers in BEA’s Special Sworn Researcher program under arrangements that maintain legal confidentiality requirements.

Definitions

A U.S. multinational enterprise (U.S. MNE) is composed of the U.S. parent and its foreign affiliates.

A U.S. parent is a person (in the broad legal sense to include any individual, partnership, corporation, or other form of organization), resident in the United States, that owns 10 percent or more of a foreign business enterprise, referred to as its foreign affiliate.

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

Employment covers the total number of full-time and part-time employees on the payroll at the end of the 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 the gross domestic product of the firm’s country of residence. The estimates of value added in this release were prepared by summing cost and profit data collected in BEA’s surveys of U.S. direct investment abroad 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) expenditures include expenditures for R&D performed by the U.S. parent or the affiliate, whether the R&D was for their own use or for use by others and irrespective of the source of funding.

Statistical conventions

The statistics on the activities of U.S. MNEs are based primarily on data reported in the Annual Survey of U.S. Direct Investment Abroad (BE-11) conducted by BEA. The statistics provide information on the operations and finances of U.S. parent companies and their foreign affiliates. The statistics on foreign affiliates cover the entire operations of the affiliate, irrespective of the percentage of U.S. ownership.

To compute the U.S. parent share of U.S. private industry employment, BEA used comparable statistics at the aggregate level for all U.S. private industries from BEA’s national income and product accounts (NIPAs) in line 3 (private industries) of Table 6.4D Full-Time and Part-Time Employees by Industry.

To compute the U.S. parent share of U.S. private industry value added, BEA used comparable statistics at the aggregate level for all U.S. private industries from BEA’s gross domestic product by industry accounts in line 2 (private industries) of the Value Added by Industry table.

To compute the effective tax rate, BEA used U.S. income taxes, which include U.S. federal, state, and local income taxes, and net income from Table I. P1 of the U.S. MNE statistics. Net income is net of U.S. income taxes; therefore U.S. income taxes and net income were added together for the denominator.

Related Statistics

Statistics on the activities of U.S. 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. affiliates of foreign MNEs, detailed annual and quarterly statistics on direct investment, and annual statistics on new foreign 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.

List of News Release Tables

Table 1. Selected Data for U.S. Parents by Industry of U.S. Parent, 2018
Table 2. Selected Data for Majority-Owned Foreign Affiliates by Industry of Affiliate, 2018
Table 3. Selected Data for Majority-Owned Foreign Affiliates by Country, 2018
Table 4. Employment of Majority-Owned Foreign Affiliates, Country by Industry of Affiliate, 2018