Foreign Direct Investment in the United States, Third Edition / Edition 3

Foreign Direct Investment in the United States, Third Edition / Edition 3

ISBN-10:
0881322040
ISBN-13:
9780881322040
Pub. Date:
01/28/1995
Publisher:
Peterson Institute for International Economics
ISBN-10:
0881322040
ISBN-13:
9780881322040
Pub. Date:
01/28/1995
Publisher:
Peterson Institute for International Economics
Foreign Direct Investment in the United States, Third Edition / Edition 3

Foreign Direct Investment in the United States, Third Edition / Edition 3

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Overview

The share of the US economy controlled by foreign firms has tripled since the mid-1970s. The authors find that foreign firms appear to invest in the United States mainly to exploit their individual advantages in management and technology - the same reasons why American firms invest abroad - rather than because the United States is now running large deficits and has become a large debtor nation. Foreign-owned firms do not pay lower wages or shift good jobs and research and development away from the United States. Foreign-owned firms and especially Japanese firms do, however, have a marked tendency to import more of their production inputs. The authors warn that the President's new legislative authority to screen FDI on national security grounds could easily be abused, but endorse using this authority to ensure access to critical technologies or production processes including a requirement on some foreign firms to invest in the United States. They propose new international rules to minimize governmental interference and harmonize policies toward multinational firms.


Product Details

ISBN-13: 9780881322040
Publisher: Peterson Institute for International Economics
Publication date: 01/28/1995
Series: Policy Analysis in International Economics Series
Edition description: 3rd Edition
Pages: 207
Product dimensions: 6.00(w) x 9.00(h) x 0.70(d)
Age Range: 18 Years

About the Author

Edward M. Graham (1944–2007) was a senior fellow at the Peterson Institute from 1990 to 2007. He also taught concurrently as adjunct professor at Columbia University in New York. Previously he was an economist at the US Treasury and taught full-time in the business schools of several US universities (MIT, University of North Carolina Chapel Hill, Duke University, among others). While serving at the Treasury, he was seconded for two years to the Organization for Economic Cooperation and Development (OECD) in Paris. He also served as visiting or adjunct faculty at the University of Virginia, Charlottesville; Stanford University (Washington Program); The Johns Hopkins University; Seoul National University; Harvard University (John F. Kennedy School of Government); INSEAD (European Institute of Administration, Fontainebleau, France); and the University of Paris I (Pantheon/La Sorbonne). His research interests have included foreign direct investment, international competition policy, and the industrial organization of major Asian economies.

Paul.R Krugman is an American economist, Distinguished Professor of Economics at the Graduate Center of the City University of New York, and an op-ed columnist for The New York Times. In 2008, Krugman was awarded the Nobel Memorial Prize in Economic Sciences for his contributions to New Trade Theory and New Economic Geography. Krugman was previously a professor of economics at MIT, and later at Princeton University. He retired from Princeton in June 2015, and holds the title of professor emeritus there. He is also Centenary Professor at the London School of Economics, and was President of the Eastern Economic Association in 2010.

Table of Contents

Prefacexi
Acknowledgmentsxv
Introduction1
1Extent and Trends7
What Is FDI?7
The Rise of FDI: Alternative Measures11
The Mechanics of FDI21
The Role of Japan23
Banking24
Real Estate28
FDI in Other Countries31
Conclusions33
2Sources of Growth35
The Theory of Foreign Direct Investment35
Evidence on FDI in the United States38
The Role of Financial Markets42
Taxation47
Protection49
The Business Cycle50
Three Case Histories51
The Outlook for FDI55
Conclusions56
3Economic Impact57
The Gains from FDI57
The Potential Costs of FDI59
Characteristics of FDI in the United States67
The "Fire Sale" Issue80
Transfer Pricing and Tax Avoidance82
Conclusions84
4Political Effects85
The Economics of Foreign-Owned Factors86
Political Influence of Foreign-Owned Firms88
How Much Does It Matter?90
International Rules of the Game92
5National Security Concerns95
FDI and National Security in Time of War or National Emergency96
FDI by Friendly Powers111
Some Unresolved Issues119
6Current US Policy121
Federal Policy122
State and Local Policies140
Comparisons with Other Nations144
Conclusions146
7Policy Alternatives149
Proposals for Changes in US Policy That Are Unsound152
An Agenda for US Policy on FDI161
Conclusions173
Appendices
Appendix AUS Data on Foreign Direct Investment179
Appendix BIndustrial-Organization Explanations of Foreign Direct Investment191
References195
Index201
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