Weissman Center Survey Concludes that Foreign Affiliates in NYC Hire Locals, Keep Most Profits Here
90% Pleased with NYC; Contact with Local Companies a Boon
May 10, 2005 – Why do foreign companies choose to operate
in New York City? What is the value to them of a local presence?
How do they benefit New York City’s economy?
Answers to these questions and additional insight on the macro and micro issues of corporate foreign affiliates were the goals of a large-scale survey of international companies in New York City, conducted under the auspices of the Weissman Center for International Business at Baruch College. One hundred forty-two foreign companies, with median revenues of $11 million, participated in the survey, released today at Baruch College.
According to the findings, New York City foreign affiliates employ only small numbers of expatriates and rely heavily on the local labor market. Over half (59%) hire at least 95% of their staff from the New York City area.
Another local benefit is that most of the profits of the foreign affiliates remain in New York City. Almost half (46%) of the companies don’t transfer any profits to their overseas headquarters, and another one out of five (19%) keep 75% or more of their profits here.
“Our survey confirms what we’ve sensed anecdotally, that foreign affiliates are a positive force for New York City’s economy,” observed Lilach Nachum, Professor of International Business at Baruch College’s Zicklin School of Business. Professor Nachum believes this survey is the largest and most comprehensive ever conducted of foreign affiliates in New York City.
Further good news for New York City is the overall satisfaction expressed by the foreign companies that have chosen to operate here. Fully 90% would choose New York City if they had to select a location again. This satisfaction has increased since 1995 when another study of foreign affiliates conducted by Baruch College indicated 82% of survey respondents would choose New York City again.
Foreign affiliates are engaged in frequent interaction with other companies here. According to the current survey, about half of the respondents meet with people from other companies in their industry once per week, and another 22% meet monthly with others in their industry. Close to 70% have interaction with companies in other industries at least monthly. Three-quarters report their meetings are an important, or very important, source of industry or client knowledge.
“What ties most of these international organizations to New York City is the local learning and networking taking place via intense interaction with other companies located here,” said Professor Nachum.
If Not NYC, Where?
If the foreign companies were to leave New York City, the surrounding tri-state region is the most frequently selected destination of choice. Other attractive destinations are Chicago, Los Angeles, and Washington, DC.
About the Survey
A written survey questionnaire was sent to foreign affiliates
in New York City listed in the Directory of International
Business, a joint project of the Weissman Center for International
Business, Baruch College, and the Division for International
Business of the Office of the Mayor. Over 40% of respondents
are from Western Europe and 38% are from Asia or Southeast
Asia. Also represented in the sample are Latin America, Eastern
Europe, Africa and Canada. A range of industries are represented,
with more than half, however, in financial services or consulting
(39%) and retail or manufacturing (20%).
Led by Professor Nachum, the following professors from Baruch College collaborated on the survey: Mark Chadwin, Andreas Grein, and Clifford Wymbs.
For more detailed survey results, contact Professor Nachum at Lilach_Nachum@baruch.cuny.edu, 646-312-3303.