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When it comes to attracting Italian investors looking into the U.S., Georgia occupies a strong regional position, according to a new report from the Italian embassy in Washington aiming to pinpoint with greater clarity the impact of the bilateral investment relationship.
With 81 subsidiaries, the state is nowhere close to being the top choice for Italian firms, trailing the likes of New York, Florida and Texas.
But compared to its near peers and neighbors — like Tennessee (26), Alabama (4) and South Carolina (30), it seems to have a considerable head start.
The state’s only formidable regional rival is North Carolina, home to 114 Italian companies, 13 of them employing more than 100 people.
Nine of Italy’s Georgia subsidiaries employ more than 100 workers, while 12 employ more than 50 and 34 have more than 10.
Beyond Georgia, the Southern region, which for the purposes of the study includes a swath of the U.S. spanning from Delaware (200+ Italian companies — many of them likely set up for tax purposes) to Texas and Florida, outpaces other parts of the U.S. when it comes to winning Italian investment.
“Italy has always been a reliable partner for the U.S. We aim to increase investments in both directions, especially in the most innovative sectors, from biotech to the space economy, from artificial intelligence to advanced materials,” Ambassador Mariangela Zappia said in a news release announcing the findings of the study, commissioned to provide a more coherent view of Italian impact in the U.S.
To reach the results, researchers at the University of Breschia, sought to make sense of the wide disparity between U.S. data on foreign direct investment, which put employment from Italian multinationals in the U.S. at the “ungenerous” total of 98,700, and the Italian National Institute of Statistics, which put the number at 220,000, including 158,000 working in the industrial arena.
Noting that cross-border investment statistics are notoriously hard to unwind, researchers concluded that many subsidiaries which could be considered Italian by brand and in substance were hidden under the headings of countries like Luxembourg and the Netherlands, which house their financial ownership after decades of mergers and acquisitions. The report gave the example of Ferrerro, the Italian confectioner, which is technically based in Luxembourg since 1973, or the Carlo Gavazzi Group’s Zurich headquarters.
Researchers also assumed that U.S. figures failed to attribute majority shareholding of large conglomerates like EssilorLuxottica and Stellantis to Italian firms, given the entanglements of their Italian precursors with companies from other countries.
Pirelli Tire, whose Italian parent was purchased by a Chinese conglomerate, is a prime example of how ultimate ownership can skew statistics: The tire brand, which operates a factory in Rome, Ga., runs largely as an autonomous Italian entity despite technically being a part of ChemChina and perhaps considered by the U.S. as a Chinese investor.
Overall, the report found 3,519 U.S. affiliates of Italian firms, with 3,187 of them operating as subsidiaries, meaning their controlling ownership lies with Italian entities.
These subsidiaries employed 251,711 people in their U.S. operations and posted $139 billion in revenues. They are owned by 1,826 Italian entities, most of which own a single subsidiary. The Enel (446 invested companies) and Autogrill groups (165 investees) are notable exceptions to the rule.
Georgia communities looking to recruit future Italian investment may do well to look at a breakdown toward the end of the report, which shows the origin regions in Italy of the Italian subsidiary companies invested in the U.S.
Perhaps unsurprisingly, the Northwest and Northeast regions of Italy, generally recognized as more highly industrialized than the south, accounted for 1,483 and 1,116 subsidiariea, some 73 percent of the total.
- Read the release on the Italian embassy’s website
- See the full report here and pasted below:
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