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Foreign Direct Investment in the United States
2nd Edition
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- Book details for Foreign Direct Investment in the United States
- Edward M. Graham (author), Paul R. Krugman (author)
- Paperback, 225 x 150mm , xxviii,196 pp, references, tables, figures, index
- 01 Jan 1993
- Institute for International Economics,U.S.
- 0881321397
- 9780881321395
This updated second edition puts the case for several new policy measures to ensure the safety of US national security in the light of the larger role of foreign firms in the US economy. It opposes new measures that seek to protect US competitiveness by controlling foreign direct investment. A specific recommendation of the book is that the Exon-Florio provision of the Omnibus Trade and Competitiveness Act of 1988 (which allows the President to block any takeover of a US firm by a foreign investor that threatens national security) be linked to US antitrust law to permit blockage if the takeover would substantially increase the dependence of the US military on one or a few suppliers. In situations where foreign firms possess technologies more advanced than those of domestic firms, however, the national security interest is enhanced if such firms have a substantial stake in the US economy. Thus they should be required to invest in the United States (and meet selected performance requirements) rather than be discouraged from controlling operations on US soil. Another recommendation is that the Technology Preservation Act (HR 2624) sponsored by Representatives Cardiss Collins (D-IL) and Richard A. Gephardt (D-MO), whose underlying premise is, in the authors' view, flawed in that it could lead to US technological inferiority in key industries, should be discounted.
Extent and trends; sources of growth; economic impact; political effects; national security implications; current US policy; policy alternatives. Appendices: US government data on foreign direct investment; industrial-organization explanations of foreign direct investment.
