BEA Has Established Steps to Ensure Compliance With Its FDIUS Surveys

BEA obtains information on FDIUS through four survey questionnaires that cover a wide range of financial and operating data for U.S. affiliates of foreign firms. Beginning in 1990, BEA established steps to ensure compliance with its FDIUS surveys by strengthening survey follow-up procedures and increasing the number of staff devoted to survey follow-up. Data-Sharing Efforts Generated New, Detailed FDIUS Data

The BEA-Census and BEA-BLS data link projects, initiated under the 1990 act, have greatly improved the amount and quality of data available about FDIUS. The data have enabled Commerce to produce more detailed analyses of FDIUS and to draw more meaningful comparisons between the activities of U.S. affiliates of foreign firms and those of U.S. firms than previous data allowed. According to Commerce officials, several opportunities exist to improve FDIUS data sharing. Comments From the Department of Commerce

Objectives, Scope, and Methodology

The Foreign Direct Investment and International Financial Data Improvements Act of 1990 directs us to analyze and report on Commerce’s first three annual reports on FDIUS and review government efforts to improve the quality of FDIUS data. Specifically, our objectives were to (1) assess the extent to which Commerce’s second and third reports—issued in 1993 and 1995—fulfilled the requirements of the 1990 act and addressed the recommendations in our 1992 review; (2) review the process by which federal agencies collect FDI data; (3) review the status and processes of the data exchanges, or links, initiated by the 1990 act between the Commerce Department’s Bureau of Economic Analysis (BEA) and its Bureau of the Census and between BEA and the Labor Department’s Bureau of Labor Statistics (BLS); and (4) evaluate the extent to which implementation of the act has brought about the intended improvements in public information on FDI in the United States.
Why GAO Did This Study

Pursuant to a legislative requirement, GAO reviewed the Department of Commerce's first three annual reports on foreign direct investment in the United States (FDIUS) and governmental efforts to improve the quality of FDIUS data, focusing on: (1) the extent to which Commerce's reports fulfilled legislative requirements and addressed prior GAO recommendations; (2) how FDIUS data is obtained; (3) the status of data sharing between the Bureau of Economic Analysis (BEA) and the Bureau of Census and between BEA and the Bureau of Labor Statistics (BLS); and (4) the extent to which implementing legislation has improved public information on FDIUS.

What GAO Found

GAO found that: (1) Commerce's FDIUS reports included all of the applicable data requirements and responded to prior GAO recommendations; (2) the reports' analyses and conclusions relating to FDIUS economic effects were generally thorough and reasonable, but in a few instances, Commerce's conclusions were more definitive than evidence warranted; (3) BEA obtains FDIUS information through survey questionnaires that require U.S. affiliates of foreign firms to report on financial and operating data; (4) BEA has strengthened its survey procedures and increased its staff devoted to survey follow-up in order to ensure compliance with reporting requirements; (5) BEA-Census and BEA-BLS data sharing efforts have generated data on U.S. affiliates of foreign firms at a greater level than was previously available, allowing Commerce to draw more meaningful conclusions in its reports; (6) certain restrictions and factors related to the protection of confidential data continue to limit more extensive data sharing among federal agencies; and (7) Commerce has fulfilled the legislative requirements by improving the quantity and quality of FDIUS data, resulting in both government officials and private sector analysts gaining access to previously unavailable FDIUS data.