Cross-border transactions of business services, published by BEA as part of international transactions accounts, include research, development, and testing (RDT) services under the category of business, professional, and technical services. RDT services include commercial and noncommercial research as well as product development and testing services. In 2009, U.S. RDT exports and imports stood at $18.2 billion and $15.8 billion, respectively, for a balance of $2.5 billion (appendix table
Transactions in RDT services provide insights into business R&D-related transactions, including exchanges among unaffiliated or independent companies (unaffiliated trade) and trade within MNCs (affiliated trade). As described below, most transactions in these R&D-related services occur within multinational corporations. Further, the patterns of U.S. RDT exports and imports differ for U.S. and foreign MNCs.
Most RDT trade occurs within companies. Since 2001, when affiliated RDT trade data were first available, transactions among MNCs members (parent companies and subsidiaries) have represented around 85% of total RDT exports annually. This share is consistent with the large role of MNCs (including U.S. parents and foreign-owned companies) in U.S. business R&D performance. (See section "R&D by Multinational Companies.") Likewise, within-company imports accounted for 66% to 78% of total RDT imports annually over the same period. The large share of this affiliated or within-company RDT trade reflects the need for management control and proprietary protection in cross-border transactions involving intangible assets.
Foreign MNCs with operations in the U.S. are exporting more RDT services to their foreign parents (and other members of the foreign MNCs) compared with their level of imports. Foreign MNCs with activities in the U.S. reported average annual net exports of $3.9 billion between 2006 and 2009, with net exports fluctuating between $3.4 billion to $4.5 billion over this period. On the other hand, U.S. MNC parents imported annually about the same or slightly more of those services relative to their exports over the same period (table
Europe accounted for about half of U.S. total RDT exports and imports in 2009 (appendix table