Posts Tagged 'Multinational companies'

A New Look at State-Level R&D by Multinational Companies

The amount of research and development (R&D) generated by multinational companies varies widely across U.S. states.

A new examination of data shows that the R&D performed by foreign-owned U.S. affiliates in 2007 ranged from $1 million in South Dakota to $5.3 billion in California. In addition to California, the R&D of U.S. affiliates was higher than $2.5 billion in three other states: New Jersey, Pennsylvania, and Michigan.chart 1_0920

The R&D performed by U.S. parents of foreign affiliates ranged from $8 million in Wyoming to $43 billion in California.  In nine other states—Massachusetts, Michigan, New Jersey, Washington, Texas, Illinois, Pennsylvania, Connecticut, and New York—the R&D of U.S. parents was higher than $5 billion.

chart 2_0920

The state-level data recently became available through an interagency project that linked information from the Bureau of Economic Analysis’ annual surveys of multinational companies to information from the Survey of Industrial Research and Development conducted by the Census Bureau for the National Science Foundation.

The new research shows that states with the highest levels of R&D performed by multinationals tend to be the states that also have the highest levels of R&D generated by all U.S. businesses.

There are, however, significant differences among these states in terms of the relative importance of R&D performed by U.S. affiliates.table 1_0920

California, the top-ranking state for R&D performed by both U.S. affiliates and all U.S. businesses, accounts for 24 percent of the total R&D performed by all U.S. businesses but for only 16 percent of the total R&D performed by U.S. affiliates.  Reflecting this disparity, the share of California’s gross domestic product (GDP) (adjusted to count R&D expenditures as investment) accounted for by all-U.S.-business R&D is 3.3 percent, but the share accounted for by affiliate R&D is only 0.3 percent.

In contrast, New Jersey, which ranks second in terms of R&D performed by U.S. affiliates and third in terms of R&D performed by all U.S. businesses, accounts for 14 percent of the total R&D of affiliates but for only 7 percent of the R&D of all U.S. businesses.  The share of GDP in New Jersey accounted for by affiliate R&D (1.0 percent) is much closer to the share accounted for by R&D by all U.S. businesses (3.6 percent) than is the case for California.

In addition to New Jersey, the state shares of affiliate R&D are relatively large in Pennsylvania and North Carolina.  A common characteristic of these states is a high concentration of R&D activity in the chemicals industry (mainly pharmaceuticals).

For U.S. parent companies, the state shares of total R&D more closely match the state shares of R&D performed by all U.S. businesses.table 2_0920

For California, New Jersey, and North Carolina, the state shares of total parent R&D are almost identical to the state shares of total R&D for all U.S. businesses.  The variation across states in the percentage of state GDP accounted for by parent R&D closely tracks that for the percentage accounted for by all-U.S.-business R&D.

To learn more about the state distribution of R&D performed by U.S. affiliates and U.S. parent companies, read the full report.

 

 

A New Snapshot of Multinational Firms

Worldwide employment by U.S. multinational companies increased 0.5 percent in 2010 to 34.0 million workers, with increases in both the United States and abroad, new numbers released by the U.S. Bureau of Economic Analysis show.

Employment in the United States by U.S. parent companies increased 0.1 percent to 23.0 million workers. That contrasted with a 0.6 percent decrease in total private-industry employment in the United States. The employment by U.S. parents accounted for roughly one-fifth of total U.S. employment in private industries.

Abroad, employment by the majority-owned foreign affiliates of U.S. multinational companies increased 1.5 percent to 11.0 million workers.

Worldwide capital expenditures by U.S. multinational companies increased 3.9 percent in 2010 to $621 billion. Capital expenditures in the United States by U.S. parent companies increased 3.3 percent. Capital expenditures abroad by their majority-owned foreign affiliates increased 5.5 percent.

Employment in the United States by majority-owned U.S. affiliates of foreign multinational companies decreased 1.0 percent in 2010 to 5.2 million workers. U.S. affiliates accounted for 4.7 percent of U.S. private industry employment in 2010, the same share as in 2009.

Capital expenditures by U.S. affiliates fell 1.7 percent to $147 billion.

To learn more about the operations of U.S. multinational companies and the operations of foreign multinational companies in the United States read the full report.