An Empirical Analysis of CFIUS: Examining Foreign Investment Regulation in the United States

Abstract

With increasing injections of foreign capital in the United States and rising national security concerns, the legislative and executive branches have played an expanded role in policing international investment in American companies. Arguably, no government group serves a more critical gatekeeping role than the Committee on Foreign Investment in the United States (CFIUS). Yet, its evaluative process, which permits it to examine and block any foreign attempt to garner control of an American entity, is completely obscured from the public purview. However, the Committee's secrecy does not preclude all studies of its review process. Using various government databases and reports, this Note produces one of the first empirical analyses of the CFIUS process. This Notes show through event studies that CFIUS actions lead to large protectionist wealth transfers, and the regression analysis indicates that despite claims of discriminatory application against certain nations, CFIUS denials are best explained by factors relating to valid concerns about national security.