WHY FOREIGN CORPORATIONS ARE BUYING INTO U.S. BUSINESS

In: The annals of the American Academy of Political and Social Science, Band 516, S. 169-182

Abstract

THE RAPID GROWTH OF DIRECT FOREIGN INVESTMENT IN THE UNITED STATES REFLECTS THE EMERGENCE OF HIGHLY COMPETITIVE FIRMS BASED ABROAD AND THUS IS LINKED TO THE LOSS OF U.S. INTERNATIONAL COMPETITIVENESS IN TRADE. TWO-WAY FLOWS OF DIRECT INVESTMENT HAVE BLURRED THE DISTINCTION, AT LEAST AMONG INDUSTRIAL NATIONS, BETWEEN HOST AND SOURCE COUNTRIES. WHILE THE UNITED STATES REMAINS A MAJOR SOURCE COUNTRY AS WELL AS THE STRONGEST VOICE FOR INTERNATIONAL ACTION TO REGULATE NATIONAL INVESTMENT POLICIES, IT HAS ALSO BECOME THE WORLD'S MOST IMPORTANT HOST TO DIRECT INVESTMENT, WHICH ENTAILS CONSIDERABLE DOMESTIC POLITICAL PRESSURES. A KEY POLICY QUESTION FOR THE 1990'S IS WHETHER THE USA WILL CONTINUE ITS LEADERSHIP ROLE IN COMBATING INVESTMENT POLICIES THAT ACHIEVE NATIONALISTIC OBJECTIVES AT THE EXPENSE OF GLOBAL EFFICIENCY, OR JOIN OTHER HOST COUNTRIES IN ADOPTING ITS OWN NATIONALISTIC POLICIES.