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Foreign Direct Investment: Assessment of Commerce's Annual Report and Data Improvement Efforts

NSIAD-92-107 Published: Mar 18, 1992. Publicly Released: Mar 18, 1992.
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Highlights

Pursuant to a legislative requirement, GAO reviewed: (1) the Secretary of Commerce's annual report on foreign direct investment (FDI); and (2) government efforts to improve the quality of FDI data, including the status and process for reconciliation of data exchanged among various federal agencies.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Commerce To provide a more complete discussion of foreign direct investment in the United States, the Secretary of Commerce should ensure that all subsequent annual reports on FDI provide an analysis that clearly distinguishes between costs and benefits derived from FDI in the United States and those derived from all foreign investment in the United States.
Closed – Implemented
In GAO's September 1995 report on Commerce's June 1993 and January 1995 reports, GAO determined that Commerce had adequately addressed the recommendations in its June 1993 report.
Department of Commerce To provide a more complete discussion of foreign direct investment in the United States, the Secretary of Commerce should ensure that all subsequent annual reports on FDI make greater use of available government studies and private source data.
Closed – Implemented
Commerce expects to comply with this recommendation in its annual reports on foreign investment. GAO has received the 1993 annual report and is evaluating its content. GAO review of Commerce's June 1993 report found that its eight topical chapters reflect a greater effort to integrate Commerce's data with that obtained from other government studies and private source data. In addition, chapter 9 discusses the availability and characteristics of FDI data developed by BEA, Census, BLS, and other federal government sources. Finally, appendix B presents a survey of analytical literature on FDI in the United States that includes the summary observations of numerous studies relevant to about 30 topics as well as a bibliography of some 180 studies (including several GAO reports). This appeared responsive to the GAO recommendation.
Department of Commerce To provide a more complete discussion of foreign direct investment in the United States, the Secretary of Commerce should ensure that all subsequent annual reports on FDI provide more focused analyses of publicly debated questions regarding the effects of FDI on the U.S. economy.
Closed – Implemented
Commerce expects to comply with this recommendation in its annual reports on foreign investment. GAO has received the 1993 annual report and is evaluating its content. The June 1993 report did provide more focused analysis of several publicly debated questions regarding the effects of FDI in the United States. In particular, chapter 4 discussed the performance and attributes of foreign government-owned affiliates and foreign banks in the United States. Further, chapters 6 through 8 provided analyses relative to FDI involvement in development and transfer of U.S. technology, trade in merchandise and services, and payment of U.S. income taxes, transfer pricing and income shifting. The report appeared responsive to the recommendation.

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Topics

Agency reportsCost effectiveness analysisDatabasesData collectionData transmissionEconomic analysisForeign investments in USInteragency relationsInternational economic relationsTechnology transfer