Irish companies invested €14.16 billion (£11.16 billion) abroad in 1999, the latest year for which figures are available, according to a report which shows the Republic's foreign direct investment growing rapidly. Irish firms employ almost 65,000 people in the US, compared to 100,000 employed here by US companies. Sales by foreign affiliates of 12 publicly-quoted Irish multinationals in 1999 came to €21.7 billion, compared to exports by Irish-owned firms of an estimated €19 billion, according to the report.

"Overseas investment is positive for the home economy and fears that outward direct investment by companies may lead to a hollowing out of industry and a loss of exports are misplaced," said Mr John Travers, chief executive of Forfβs, at the presentation of its report, Forfβs Statement on Outward Direct Investment.

Irish foreign direct investment was €399 million in 1994, €917 million in 1997 and €4.9 billion in 1999. The historical accumulated value of Irish foreign direct investment (that is, after devaluations or losses) was €184 million in 1985, €1.96 billion in 1990, €3.7 billion in 1995, and €13.7 billion in 1999.

Outward direct investment was a natural step in the evolution of Irish companies into strong international players, Mr Travers said. Foreign studies of the phenomenon show it has positive benefits for the home economy, with exports of finished goods being replaced and overtaken over time by exports of high value-added intermediate goods and headquarter services to foreign affiliates overseas.

The Republic was seventh in a table of EU members' per capita foreign direct investment in 1998-99. Top of the table was the Netherlands, with a level of foreign direct investment per capita €5,626) almost 21/2 times the Irish level €2,296). Over the coming years growth in foreign direct investment will most likely accelerate further as barriers to overseas investment fall and Irish firms become more sophisticated.

According to the UN Conference on Trade and Development, the Republic's direct investment relationship with the rest of the world is unusual when compared with other advanced economies. As of 1998 the ratio of the Republic's foreign direct investment stock to inward investment stock was lower than in any other advanced economy, and significantly lower than other small EU economies.