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The Internationalization of U.S. Manufacturing Causes and Consequences (1990) / Chapter Skim
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3. National Economic and Political Implications
Pages 34-40

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From page 34...
... Although it is difficult to predict all the consequences for specific companies or the national manufacturing sector, a few trends seem clear. INWARD INVESTMENT AND FOREIGN OWNERSHIP The importance of foreign investment flowing into the U.S.
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From page 35...
... Inland Steel gained additional customers as a result of working with Honda to improve the quality of its coated steel.3 Such indirect benefits, combined with capital needed for manufacturing investment, provide tangible reasons to encourage inward flows of foreign investment. Unfortunately, foreign direct investment has evoked considerable criticism for two major reasons.
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From page 36...
... technology relative to foreign technology, or to identify the range of technologies in which foreign investment should be encouraged to strengthen national capabilities. The second major criticism of foreign investment is that foreign a~liates in the United States are primarily assemblers of imported components, providing low-wage jobs and little value added.
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From page 37...
... technology an impossibility—U.S. energy should focus on facilitating the flow of foreign technology into the United States by ensuring comparable access to foreign research and conducting effective intelligence on foreign technological developments, and, most importantly, on speeding the process of turning technology into commercial products.
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From page 38...
... A good example is the recent negotiations on Motorola's access to the cellular phone market in lblyo and Osaka, which hinged on the allocation of radio frequency rights in those cities rather than on import restrictions on foreign cellular phones. In the United States the linkage has become particularly apparent in technology policy.6 The recent debate on high-definition television (HDTV)
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From page 39...
... Although foreign firms manufacturing in the United States are subject to the same regulatory regime as domestic firms, internationalization has increased the number of foreign competitors operating under different and potentially less costly regulatory conditions and created opportunities for domestic firms to produce abroad to avoid some types of U.S. regulations.
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From page 40...
... direct investment abroad. For many years the United States was relatively immune from the reciprocal consequences of these policies.
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Key Terms

  • direct investment
  • domestic firms
  • critical technologies
  • foreign firms
  • regulatory policy

  • foreign technology
  • foreign direct
  • requiring demanding
  • foreign affiliates
  • global economy

  • tangible reasons
  • particularly apparent
  • national competitiveness
  • trade statistics
  • cars built

  • international policy
  • foreign membership
  • multinational corporations
  • encourage inward
  • inward flows

  • domestic policies
  • government funding
  • phone market
  • recent negotiations
  • national debate

  • national manufacturing
  • decrying unsubstantiated
  • costly regulatory
  • investment flows
  • primarily assemblers


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