Multinational Finance

Which country had the most direct foreign investments in the United States over the last five years? Why? The United States of America, as one of the world most important economies, has always experienced tremendous amounts of Foreign Direct Investment within different sectors its economy. European nations have historically fueled America’s growth in the past with a variety of foreign Investments. According to the most recent reports disclosed, as of 2011 the largest direct foreign investor in the United States in the past five years is the United Kingdom with $454 billion dollars of investments (Jackson). Likewise the United States is the largest direct foreign investors in the United Kingdom with $421 billion of investments (Jackson). If a company from the United Kingdom purchases 15 percent or more of a US company it is considered foreign controlled. Foreign Direct investment is defined as physical investment into a country from a foreign entity. It can also be defined as a larger-scale, long-term investment outside the investor’s domestic economy. This is apposed to indirect foreign investment that is solely a provider of capital and the investing company has no share in the loss or gain of the company. Indirect investment is an investment in intangible assets, such as securities. The reason for Foreign Direct Investment is The U.S has projects in need of capital .The large influx of capital given to the US by other countries allows for more jobs, and a higher per-capita income of residents and thereby increasing the purchasing power as well as consumer wealth. By the end of 2007 Foreign Firms employed upwards of 6 million Americans and owned over 36,000 individual business establishments (U.S Department of Commerce). In the past the UK has be responsible for the largest Foreign