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U.S. multinational companies: operations in 1990.

This article presents preliminary estimates of the operations of nonbank U.S. multinational companies (MNC'S). These estimates are based on data from the Bureau of Economic Analysis (BEA) 1990 annual survey of U.S. direct investment abroad (USDIA).

The following are highlights from the survey.

* Worldwide assets of U.S. MNC'S increased 5 percent to $6,522.1 billion; sales increased 8 percent to $4,758.9 billion; and employment decreased 1 percent to 25.3 million workers (table 1). U.S. parent companies' assets increased 2 percent, sales increased 4 percent, and employment decreased 1 percent. Foreign affiliates' assets increased 17 percent, sales increased 15 percent, and employment was little changed. (Much of the increase in the assets and sales of MNC'S and affiliates, however, appears to have been the result of dollar depreciation.)

* The relative stability of affiliates' employment reflected a number of offsetting changes. Growth in employment in manufacturing, wholesale trade, and "finance (except banking), insurance, and real estate" (FIRE) offset declines in other industries. By area, growth in employment in Europe, Asia and Pacific, and "Latin America and Other Western Hemisphere" offset declines in other areas.

* Europe was the favored location for newly acquired or established affiliates in 1990. The new European affiliates tended to be larger, on average, than those in other areas.

* For the 10 host countries in which employment by majority-owned foreign affiliates (MOFA'S) was largest, the share of total host-country business employment accounted for by MOFA'S ranged from 9.7 percent in Canada to 0.3 percent in Japan.

* The MOFA share of selected measures of worldwide MNC operations in 1990 was either the same as or higher than it was 1982. The MOFA shares of worldwide MNC employment and sales in 1990 were similar to their 1982 levels, but the MOFA shares of net income, research and development expenditures, and capital expenditures were higher in 1990 than they were in 1982.

* MNC-associated U.S. exports were $248.5 billion, or 63 percent of all U.S. merchandise exports in 1990 (down from 65 percent in 1989). MNC-associated U.S. imports were $214.4 billion, or 43 percent of all U.S. merchandise imports in 1990 (up from 42 percent in 1989).(1)

The first section of this article analyzes the domestic, or parent, operations of U.S. MNC'S, and the second section analyzes the operations of their foreign affiliates. The third section analyzes how the global distribution of U.S. MNC operations--that is, between U.S. parents and MOFA'S--changed during the 1980's. The last two sections analyze U.S. merchandise trade associated with U.S. MNC'S and MNC sales by type and by destination. In this article, information from outside sources, mainly press reports, is used to supplement BEA'S survey data.

U.S. Parent Operations

The operations of U.S. parent companies in 1990 were constrained by sluggish U.S. economic conditions and by corporate downsizing in certain industries, such as autos and aerospace, in response to longer term structural changes in the U.S. economy. In 1990, U.S. parents' assets increased 2 percent, compared with a 9-percent average annual rate in 1982-89; employment fell 1 percent, compared with a near-zero growth rate in 1982-89; and sales increased 4 percent, about the same rate as in 1982-89 (table 1). The remainder of this section will examine changes in parent operations in terms of employment by industry. Employment will be examined because, unlike assets and sales, it is not directly affected by valuation changes (such as those caused by inflation or exchange-rate fluctuations). [TABULAR DATA 1 OMITTED]

The relative stability of parent employment in 1990 reflected a number of largely offsetting changes among industries (tables 9.1 an 9.2). Most of the changes in primary and fabricated metals manufacturing, nonelectrical machinery manufacturing and wholesale trade were accounted for by industry reclassification of U.S. parents, which have no net effect on the all-industries total.(2) Changes in the remaining industries were more directly tied to the actual growth or decline in parent operations.

The largest decreases in parent employment were in transportation equipment manufacturing and in "other" manufacturing. In transportation equipment, parent employment decreased 4 percent; the decrease was spread between the two major segments of the industry--the automotive ("motor vehicles and equipment") and aerospace industries (included in "other transportation equipment"). In the automotive industry , the decrease in employment mainly reflected reduced production due to falling demand in the U.S. auto market; it also reflected plant closings in response to a gradual loss of market share to foreign competitors. In aerospace, the decrease in employment reflected parents' efforts to bring their employment in line with reduced orders for military equipment. In "other" manufacturing, parent employment decreased 4 percent, partly because of industry reclassifications of companies whose mix of activities has shifted and partly because of the divestiture of peripheral businesses.

The largest increases in employment were in "other" industries and in petroleum. In "other" industries, parent employment increased 1 percent, mainly in communication and public utilities and in transportation. Increases in these industries resulted both from U.S. companies establishing or acquiring foreign affiliates for the first time in 1990 and from existing parent companies expanding their operations. In petroleum, a 3-percent increase in employment was largely attributable to new MNC'S.

Foreign Affiliate Operations

Overview of changes

As measured in U.S. dollars, foreign affiliates' assets and sales grew faster in 1990 than during 1982-89 (table 1). Assets increased 17 percent in 1990, compared with an average annual growth rate of 9 percent during 1982-89, and sales increased 15 percent, compared with 5 percent. However, the 1990 increases were mainly the result of changes in prices and exchange rates. In 1990, the dollar fell sharply relative to major European currencies and the Japanese yen, which boosted the dollar value of assets and sales denominated in those currencies. In addition, higher oil prices raised the value of sales and of certain assets (mainly accounts receivable).

Affiliate employment, which is not directly affected by prices and exchange rates, was stable in 1990.

Changes by source

The year-to-year in affiliate operations are the net result of changes in existing operations, the acquisition or establishment of affiliates, the sale of affiliates to foreigners, the liquidation of affiliates, and improvements in survey coverage (table 2)(3) For assets and sales, growth in ongoing operations was by far the largest contributor to the year-to-year changes. For employment, a large decrease that was related to sales and liquidations of affiliates partly offset increases that were related to acquisitions and establishments of new affiliates, to improvements in coverage, and to growth in existing operations. Excluding improvements in coverage, affiliate employment would have been little changed between 1989 and 1990. [TABULAR DATA 2 OMITTED]

Acquisitions and establishments.--In 1990, 222 affiliates were established or acquired, with a combined employment of 131,000 (table 3). By area, Europe accounted for most of these new affiliates. New affiliates in Europe were larger, on average, than those in other areas; new European affiliates had an average of 772 employees, compared with an average of 196 employees for new affiliates in other areas. [TABULAR DATA 3 OMITTED]

By industry, most new investments abroad were in manufacturing; new manufacturing affiliates accounted for 47 percent of the number of new affiliates and for 87 percent of their employment. In contrast, new affiliates in FIRE accounted for relatively small shares of the new affiliates and their employment; however, they accounted for a large share--42 percent--of new affiliates' assets. This large share reflects two features of the industry: The large equity investments in operating affiliates controlled by holding companies that have few, if any, employees, and the tendency for the assets of finance affiliates to be very large.

Highlights by area and by industry

This section analyzes the changes in affiliate operations in 1990 in terms of employment, both by area and by industry. By area, employment growth was strongest in Europe, Asia and Pacific, and "Latin America and Other Western Hemisphere" (tables 10, 11.1, and 11.2). Employment declined in Canada, Africa, and the Middle East. By industry, employment growth was strongest in manufacturing, wholesale trade, FIRE, and "other" industries. Employment declined in petroleum and in services.

In Europe, affiliate employment increased 4 percent to 2.8 million employees in 1990, reflecting the expansion of existing operations as well as acquisitions and establishments. The expansion of existing operations reflected the relatively high rate of European economic growth. The new investments were concentrated in manufacturing and probably were attracted by the prospect of increased European economic integration. In Asia and Pacific, employment increased 2 percent to 1.5 million. Manufacturing affiliates in some of the newly industrialized Asian economies expanded their capacity to produce goods for export; increases were also large in wholesale trade. In "Latin America and Other Western Hemisphere," employment increased 2 percent to 1.3 million. The largest increase occurred in transportation equipment manufacturing, partly reflecting rising Mexican auto sales; increases were also large in FIRE.

In Canada, affiliate employment decreased 2 percent to 932,000 employees. The decline reflected several large divestitures and sluggish economic conditions in the United States and Canada. In Africa, employment decreased 2 percent to 114,000, as a manufacturing affiliate was sold. In the Middle East, employment decreased 47 percent to 49,000, as a large petroleum affiliate was transferred to a host government.

Majority-owned foreign affiliates

This section analyzes the operations of majority-owned nonbank foreign affiliates (MOFA'S), in which the combined ownership by all U.S. parents exceeds 50 percent. For some purposes, an analysis of the operations of MOFA's is preferable to that of the operations of all affiliates, because U.S. parents typically have unambiguous control of MOFA's. In addition, BEA collects more detailed data for MOFA's than for other affiliates.

In 1990, the MOFA share of all affiliate employment averaged 78 percent (table 4). Of the countries presented in table 4, the MOFA shares were highest in Canada (93 percent), the United Kingdom (90 percent), and Germany (89 percent). They were lowest in India (27 percent), Japan (35 percent), and the Republic of Korea (37 percent). In countries with lower-than-average shares, majority ownership by foreigners may be restricted in certain sectors of the host economies. In India, for example, foreign ownership of businesses engaged predominantly in trading activities was restricted to 40 percent in 1990 (unless the firm met certain technology transfer and export performance criteria).(4) The low shares may also reflect strategic business decisions by the U.S. parents; for example, U.S. parents may acquire minority interests in affiliates to share knowledge and to facilitate trade rather than to influence operations or management. [TABULAR DATA 4 OMITTED]

MOFA share of host-country employment.--The MOFA share of the total private workforce in the 10 host countries in which MOFA employment was largest ranged from 9.7 percent in Canada to 0.3 percent in Japan (table 5).(5) The MOFA shares were largest in Canada and Mexico, partly because of those countries' close proximity to, and relatively high degree of integration with, the U.S. economy. MOFA shares were also relatively large in countries--such as Canada, the United Kingdom, and Australia--where English is spoken. MOFA shares were smallest in Italy, Brazil, and Japan.

For comparison, estimates of employment of majority-owned U.S. affiliates (MOUSA'S) of foreign owners in each of the same 10 countries, and their share of total U.S. employment, are shown in the addenda to table 5. The MOUSA shares ranged from 1.0 percent for the United Kingdom to less than 0.05 percent for Mexico and Brazil. For each country except Japan, the MOUSA share of total U.S. employment is smaller than the MOFA share of total employment in that country.(6) [TABULAR DATA 5 OMITTED]

MOFA Operations in a Worldwide MNC Context

This section analyzes the relationship between U.S. parent and MOFA operations of U.S. MNC'S in 1982-90. Five measures of worldwide MNC operations--employment, sales to unaffiliated persons, net income, research and development expenditures, and capital expenditures--are examined to see if the MOFA share increased during the past decade.(7) The estimates of all the measures except sales to unaffiliated persons cover 1982, 1989, and 1990; the estimates of sales to unaffiliated persons cover only 1982 and 1989 because the relevant data are only collected on benchmark surveys and so were unavailable for 1990.(8)

For each measure of operations, the MOFA share of the MNC total in 1990 was either about the same as or higher than it was in 1982 (table 6). In 1990, in all industries combined, MOFA's accounted for roughly the same percentage of worldwide MNC employment as they did in 1982, and they generated roughly the same percentage of worldwide MNC sales. However, MOFA's accounted for a greater portion of worldwide MNC net income and for a greater portion of worldwide MNC budgets for capital investments and research and development. [TABULAR DATA 6 OMITTED]

The stability in the MOFA share of MNC sales and employment suggests that the relative size of domestic and MOFA operations for most MNC's probably did not change significantly during the period. However, the increase in the MOFA share of MNC capital expenditures suggests that the MOFA operations of MNC's in some capital-intensive industries, such as petroleum, increased in relation to their domestic operations.

The increase in the MOFA share of MNC net income generally reflected weaker market conditions and more competition in the United States than abroad. The MOFA share of research and development expenditures increased partly because some U.S. MNC's joined foreign research consortia.

The remainder of this section will discuss the changes in each of the five measures of MNC operations, both at the all-industries level and at the industry level. For this discussion, the data for MNC's, parents, and MOFA's are classified by major industry of the U.S. parent.

Employment

The MOFA share or worldwide MNC employment in 1990 was essentially unchanged from that in 1982--22 percent, compared with 21 percent. In only one industry--nonelectrical machinery manufacturing--did the MOFA share of employment show a pronounced increase. In that industry, the MOFA share of employment increased 10 percentage points to 36 percent, as U.S. parents in the computer industry made sharp cuts in their staffs domestically, while employment by their MOFA's increased. Among major industries, changes in MOFA shares were small and largely offsetting. MNC's in services, wholesale trade, petroleum, and manufacturing employed a somewhat larger share of their workers through their MOFA's in 1990 than in 1982, while MNC's in FIRE employed a somewhat smaller share through their MOFA's.

Sales to unaffiliated persons

Sales by MOFA's to unaffiliated persons did not generate a larger share of the worldwide revenue of U.S. MNC's in 1989 than in 1982; in both years, MOFA's accounted for 20 percent of worldwide MNC sales to unaffiliated persons.

Only in nonelectrical machinery did the MOFA share of sales, like the employment, show a pronounced increase between 1982 and 1989. MNC's in that industry generated 41 percent of their worldwide revenues through their MOFA's in 1989, up from 30 percent in 1982. This increase was largely accounted for by MNC'S in computer manufacturing. In computer and office equipment manufacturing, unaffiliated sales by MOFA'S grew at nearly twice the rate of those by their U.S. parents. Domestically, the revenues of U.S. computer companies were dampened by intense competition that restrained prices. In contrast, foreign markets for computer products were more favorable; thus, MOFA's experienced relatively higher prices and more stable revenues.

Among major industries, changes were small and largely offsetting. MNC's in petroleum, manufacturing, and services generated somewhat larger shares of their worldwide sales through their MOFA's MNC's in wholesale trade, FIRE, and "other" industries generated somewhat smaller shares through their MOFA's.

Net income

One aspect in which MOFA operations became much more important to U.S. MNC's during the 1980;s was profitability. The MOFA share of worldwide MNC net income grew from 20 percent in 1982 to 35 percent in 1990. Increases occurred in nearly all industries in which U.S. MNC's operated, with the sharpest increases in transportation equipment manufacturing (mainly automobiles), nonelectrical machinery manufacturing (mainly computers), and "other" manufacturing (mainly cigarettes and textiles).

In transportation equipment, the MOFA share of MNC net income almost quadrupled, from 16 percent in 1982 to 600 percent in 1990. This trend was concentrated in the automobile manufacturing industry and mainly reflected a domestic market that was less robust and more competitive than foreign markets. After peaking in 1986, car sales in the United States fell through 1990, while in most major foreign markets (especially in Europe and Mexico) car sales were rising. In addition, U.S. parent companies faced more competition from Asian producers than did their MOFA's in Europe and Mexico. In response to these unfavorable domestic market conditions, U.S. parents in the auto industry offered substantial rebates and other costly consumer incentives in the United States. These incentives--which generally were not used in foreign markets--tended to make the domestic operations of MNC's less profitable than their MOFA operations.(9)

In nonelectrical machinery manufacturing, the MOFA share of MNC net income increased from 35 percent in 1982 to 57 percent in 1990. The increase reflected the less favorable domestic market conditions in the computer industry.

In "other" manufacturing, the MOFA share increased from 16 percent to 37 percent; the increase was accounted for by changes in the tobacco and textile industries. In the tobacco industry, U.S. parents' net income fell from $2.2 billion in 1982 to $0.9 billion in 1990, while MOFA net income increased from $0.3 billion to $1.0 billion. Parents' net income was constrained by interest expenses related to the sizable debt assumed in connection with leveraged buyouts during the late 1980's. In the textile industry, the MOFA share of MNC net income increased from 5 percent in 1982 to 82 percent in 1990; one contributing factor was demand for denim jeans, which was more robust in overseas markets than in the United States.

Research and development expenditures

The MOFA share of worldwide MNC expenditures for research and development (R&D) increased slightly, from 9 percent in 1982 to 13 percent in 1990.(10) Almost all R&D expenditures occurred in manufacturing. Within manufacturing, the MOFA share in nnelectrical machinery (mainly in computers) increased substantially (up 13 percentage points). This increase occurred at the end of the decade and reflected both the fastr growth in foreign operations than in U.S. operations and the introduction of U.S. computer manufacturers to foreign research consortia as they sought to share the cost of developing new technologies. The MOFA share also increased in primary and fabricated metals, chemicals and allied products, food and kindred products, and electric and electronic equipment. In transportation equipment and "other" manufacturing, the MOFA share was essentially unchanged.

Capital expenditures

U.S. MNC's allocated an increasing portion of their capital budgets to their MOFA's during the past decade. The MOFA share of worldwide MNC capital expenditures increased from 18 percent in 1982 to 22 percent in 1990. Much of the growth was accounted for by parents in petroleum, electric and electronic equipment manufacturing, and FIRE. In petroleum, declining oil prices led U.S. parents to concentrate their expenditures for exploration and development abroad, where accessible oil deposits were larger and could be developed profitably despite low prices. In electric and electronic equipment, U.S. parents increased their overseas presence to take advantage of expanding consumer markets in Europe and to reduce costs by establishing production facilities in the Far East. In FIRE, the growth partly reflected the establishment of brokerage affiliates in Europe and Japan, as host governments liberalized their securities exchanges.

U.S. Merchandise Trade

U.S. merchandise exports associated with U.S. MNC's--the sum of goods shipped to affiliates by all U.S. persons and goods shipped to unaffiliated foreigners by U.S. parents--increased 5 percent to $248.5 billion in 1990 (table 7). Exports shipped by U.S. parents to unaffiliated foreigners accounted for 51 percent of the increase. Within this category, sales of passenger aircraft to foreign airlines fully accounted for the increase. [TABULAR DATA 7 OMITTED]

U.S. merchandise imports associated with U.S. MNC's--the sum of goods shipped by affiliates to all U.S. persons and goods shipped by unaffiliated foreigners to U.S. parents--increased 6 percent to $214.4 billion. Imports shipped by unaffiliated foreigners to U.S. parents accounted for two-thirds of the increase. Within this category, the rising cost of petroleum imports fully accounted for the increase.

As in past years, trade associated with U.S. MNC's accounted for a large share of U.S. merchandise trade in 1990--63 percent of total U.S. exports (down from 65 percent in 1989) and 43 percent of total U.S. imports (up from 42 percent in 1989).(11)

Sales by Type and by Destination

Total sales by U.S. parents were $3,278.0 billion in 1990. By type, sales of goods accounted for 71 percent of total sales, sales of services for 24 percent, and investment income for 5 percent (table 8).(12) For MOFA's, total sales were $1,191.8 billion, with sales of goods accounting for 87 percent of total sales, sales of services for 11 percent, and investment income for 2 percent. Services accounted for a notably smaller share of sales for MOFA's than for U.S. parents, perhaps because the overseas presence of MNC's is relatively smaller in services than in other industries. In 1989, the latest year for which data are available, MNC's in service industries--chiefly FIRE, "services," and "other" industries (which includes air transportation and telecommunications)--generated about 9 percent of their sales to unaffiliated persons through their MOFA's, compared with 20 percent for MNC's in all industries combined. [TABULAR DATA 8 OMITTED]

For MOFA's, each type of sales was disaggregated by destination. (For parents, only sales of services were disaggregated by destination.) In 1990, MOFA's sold $795.2 billion, or 67 percent, of their output locally in their host countries; $272.8 billion, or 23 percent, to other foreign countries; and $123.8 billion, or 10 percent, to the United States.

Local sales were most important, and sales to "other" foreign countries least important, to MOFA's in "other" industries, because that industry is dominated by retail trade affiliates, which rely almost exclusively on local markets. Local sales were least important, and sales to "other" foreign countries most important, in manufacturing, where operations tend to be integrated across foreign countries to a greater extent than in other industries, thus generating relatively more cross-border intrafirm sales.

Sales of the United States were most important to petroleum affiliates. Sales to the United States were least important to affiliates in wholesale trade and services, which mainly serve local markets. Tables 9.1 through 13.2 follow.

Key Terms

The following key terms are used to describe the members of U.S. multinational companies.

U.S. multinational company (MNC) : The U.S. parent and all of its foreign affiliates.

U.S. parent : A U.S. parent is a person, resident in the United States, that owns or controls 10 percent or more of the voting securities of an incorporated foreign business enterprise or an equivalent interest in an unincorporated foreign business enterprise. "Person" is broadly defined to include any individual, branch, partnership, associated group, association, estate, trust, corporation or other organization (whether or not organized under the laws of any State), or any government entity. If incorporated, the U.S. parent is the fully consolidated U.S. enterprise consisting of (1) the U.S. corporation whose voting securities are not owned more than 50 percent by another U.S. corporation, and (2) proceeding down each ownership chain from that U.S. corporation, any U.S. corporation (including Foreign Sales Corporations located within the United States) whose voting securities are more than 50 percent owned by the U.S. corporation above it. A U.S. parent comprises the domestic (U.S.) operations of a U.S. MNC. markets--tended to make the domestic operations of MNC'S less profitable than their MOFA operations.(9)

In nonelectrical machinery manufacturing, the MOFA share of MNC net income increased from 35 percent in 1982 to 57 percent in 1990. The increase reflected the less favorable domestic market conditions in the computer industry.

In "other manufacturing, the MOFA share increased from 16 percent to 37 percent; the increase was accounted for by changes in the tobacco and textile industries. In the tobacco industry, U.S. parents' net income fell from $2.2 billion in 1982 to $0.9 billion in 1990, while MOFA net income increased from $0.3 billion to $1.0 billion. Parents' net income was constrained by interest expenses related to the sizable debt assumed in connection with leveraged buyouts during the late 1980's. In the textile industry, the MOFA share of MNC net income increased from 5 percent in 1982 to 82 percent in 1990; one contributing factor was

Foreign affiliate : A foreign affiliate is a foreign business enterprise in which there is U.S. direct investment, that is in which a U.S. person owns or controls 10 percent or more of the voting securities or the equivalent. Affiliates comprise the foreign operations of a U.S. MNC.

Majority-owned foreign affiliate (MOFA) : A foreign affiliate in which the combined ownership of all U.S. parents exceeds 50 percent.

Nonbank : An entity (MNC, parent, or affiliate) whose primary activity is not banking. Only nonbank entities are covered by this article.

Data Availability

Only summary data are published in this article. Estimates of U.S. MNC operations in greater detail are available for 1977 and for 1982-90 in publications and, for all years except 1977, on computer-readable media (tape or diskette). For information on ordering publications, call (202) 523-0777; for information on computer media, call (202) 523-0568. Publications presenting the 1989 final benchmark survey results and the preliminary estimates for 1990 will be available later this year; their availability will be announced on the inside back cover of the Survey of Current Business. (1)MNC-associated U.S. exports are the sum of goods shipped to affiliates by all U.S. persons and goods shipped to unaffiliated foreigners by U.S. parents. MNC-associated U.S. imports are the sum of goods shipped by foreign affiliates to all U.S. persons and goods shipped by unaffiliated foreigners to U.S. parents. (2)Each U.S. parent is classified in the industry that accounts for the largest portion of its sales or, for holding companies, its total income. Many U.S. parents are involved in a variety of business activities, and changes in the mix of these activities can cause a parent's industry classification to change. (3)Through BEA's efforts to improve survey coverage, some affiliates that should have been reported in earlier years were added to the survey universe in 1990. Data for those affiliates are recorded under "improvements in coverage" in table 2. (4)Based on International Monetary Fund, Exchange Arrangements and Exchange Restrictions, Annual Report 1991 (Washington, DC: International Monetary Fund, August 1991). (5)The estimates of total employment for the selected countries are published by the International Labour Office. (6)The U.S. economy is so large relative to other economies that even if the radio of direct investment abroad to gross domestic product were similar for the United States and other nations, the share of most other countries' employment accounted for by affiliates of U.S. companies would most likely exceed the share of U.S. employment accounted for by affiliates of investors in those countries. Even for nations, such as Japan, with propensities to invest abroad above that of the United States, the share of U.S. employment is relatively small. (7)These measures were selected because the parent data and the affiliate data for all of these measures except net income are nonduplicative, and thus yield meaningful comparisons of parent and affiliate shares. The ratio of affiliate net income to total MNC net income must be interpreted cautiously because parents' net income includes the parents' shares of their affiliates' net income; thus, this amount is double-counted in the denominator of the ratio. For this reason, the ratio will be somewhat understand; likewise, any increase or decrease in the ratio will be somewhat understand (assuming that both the numerator and the denominator are positive). (8)"Sales to unaffiliated persons" measures by parents and affiliates, excluding sales among the parents and affiliates that belong to the same MNC. (9)Rebates are considered a marketing expense, rather than a reduction in selling prices, on the books of U.S. automakers. Thus, on a per-unit basis, rebates do not affect sales revenue, but they do raise costs and diminish profit margins. Therefore, while the MOFA share of sales in transportation equipment manufacturing was the same in 1982 as it was in 1989 (21 percent), it would have increased if rebates were deducted from parents' sales. (10)The definition that is used for R&D expenditures is from the Financial Accounting Standards Board Statement No. 2; the estimates of these expenditures include all charges for R&D performed for the benefit of the MNC by the MNC itself and by others on contract. (11)The data on total U.S. exports and imports used for this comparison are on a "Census basis"; exports include re-exports and military grant shipments. The data are from table 2, lines 1 and 9, in "U.S. International Transactions," Survey of Current Business 72 (June 1992): 88-89. (12)To provide a more accurate measure of sales of services, BEA began collecting separate data on investment income in its 1989 benchmark survey. Some parents and MOFA'S, primarily those in finance and insurance, include such income in sales or gross operating revenues, and BEA had previously recorded it as sales of services. Most parents and MOFA'S not in finance or insurance consider investment income an incidental revenue source and include it in their income statements in a separate "other income" category, rather than in sales.
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Author:Mataloni, Raymond J., Jr.
Publication:Survey of Current Business
Date:Aug 1, 1992
Words:5034
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