They're doing this in the form of foreign direct investment. This surge in acquiring assets abroad has prompted a search for global rules to encourage and protect overseas investments. Global rules already exist to encourage trade, with 132 nations belonging to the World Trade Organization. But no similar body of ground rules exists to foster the flow of investment among nations. Since 1980, annual global flows of FDI have grown 5 times faster than trade and 10 times faster than production.
American companies lead the world in foreign investment.
Behind this phenomenon is a growing need for American companies to establish a presence in the markets they serve. Owning affiliates abroad allows U.S. exporters to retain control of product technology and to maintain brand quality. Establishing a presence in a market puts companies closer to their customers to better tailor their products to local tastes, and to better meet local competition. Many small and mid-sized companies invest abroad to supply inputs for overseas affiliates of larger U.S. companies. If the product is a service, such as insurance or consulting, it cannot be delivered without establishing a presence in the target market.