WASHINGTON, Sept. 19 (Xinhua) -- Investments by foreign companies in the United States help create well-paid jobs and spur innovation in the world's largest economy, two American economists revealed in their latest book.
U.S. firms invest more in other countries than other countries do in the United States, but both types of investment provide enormous economic benefits to the United States, Theodore H. Moran, a nonresident senior fellow at the Washington-based Peterson Institute for International Economics (PIIE), said on Thursday.
Moran was speaking at a seminar releasing the book, which was jointly written with Lindsay Oldenski, an assistant professor at Georgetown University.
Based on U.S. government data, foreign investors in the United States pay higher wages on average than U.S. employers in a large array of industries, including manufacturing, wholesale trade, information services, finance and insurance.
"Any lingering fear that foreign investors might only locate inferior, low-wage jobs in the United States is demonstrably inaccurate," contended the two economists.
Between 1997 and 2009, sales, employment and wages, as well as research and development (R&D) spending in majority-owned affiliates of foreign firms in the United States, all increased.
Foreign firms' R&D spending in the United States was very strong and expanded even during the economic recession after the financial crisis, they claimed in the book.
Beyond job creation and R&D spending, foreign direct investment (FDI) has further economic implications.
When foreign firms enter a market, they bring new production technologies and management practices, which can have positive spillovers on the local market, said the two economists.
President of renowned think tank PIIE, Adam Posen, said any public discussions about FDI, whether inward or outward, are filled with emotional and misleading invocations of "economic patriotism" and "corporate responsibility," while this book responds to the current misplaced furore about FDI with sound analyses and constructive policy suggestions.