International direct investment surged in the last 1980s. Both U.S. direct investments in foreign countries and foreign investments in the U.S. have been growing rapidly, with the former exceeding the latter by a widening margin. Multinational corporations undertake most f these worldwide investments in order to remain competitive in foreign markets, to lower their resource and labor costs, and to gain tax advantages.
Suggested citation: “Intrafirm Trade,” Federal Reserve Bank of Cleveland, Economic Trends, no. 97-04, pp. 19, 04.01.1997.