Explorations of inward Foreign Direct Investment: U.S. and China comparative analysis

In recent decades, the majority of countries in the world have experienced substantial growth in their economies, with a larger portion from the accelerated growth in international business, especially in foreign direct investment (FDI). FDI is a key indicator in global economic prosperity and productivity. FDI encourages technology innovation, job creation, capital transfer, and optimum distribution of resources between countries. FDI has become a quantifiable benchmark for international business and the impacts it has on both the host and investing countries. The United States and China, according to A.T. Kearney FDI index, are ranked as the top two in the world for attracting foreign investment as of 2014. Historically, the United States has an open economy market and low barriers to attract foreign investment. For China, the largest foreign recipient country among developing countries, FDI has become an important factor in their economic growth. The primary purpose of this research was to discover, explore and address the role of FDI in the two economic giants of the world: the United States and China. This research includes the following characteristics of inward US and China foreign direct investment: FDI flows and stock, FDI stock as a percentage of GDP, FDI employment, FDI financial flows, and sectorial distribution of FDI. Using statistical data from 2000 to 2013, an examination was conducted on the effects of inward FDI. Findings are displayed in the forms of graphs and tables to help analyze the tendency, significance and distribution of inward FDI.