JAPANESE INVESTMENT IN THE UNITED STATES
The great hue and cry with respect to foreign investment in the United States emphasizes the acquisition by foreign buyers (the Japanese in particular) of American business enterprises and American real estate (Burritt, 1991, pp. 60 66; Levine, 1989, pp. 117 118; Gilder, 1990, p. 60). In actual fact, however, foreign investment (including that of the Japanese) in American financial instruments dwarfs that in the operational ownership of business enterprise and the ownership of real property (U.S. Department of Commerce, 1993, pp. 51 54; Standard & Poor's, 1993, p. 101; Herr, 1989, pp. 22 30). In this context, a differentiation is made between the acquisition of the operating control of a business enterprise and the purchase equity shares (common stock) in such enterprises. In 1990, foreign investment in the operational ownership of American business enterprise totaled $73.1 billion, and foreign investment in the ownership of American real estate totaled $34.6 billion, while that in the capital markets soared to $296 billion two and three quarters times the combined foreign investment in the operational ownership of American business enterprises and foreign ownership of American real estate (U.S. Department of Commerce, 1993, p. 77 78).
With respect to the source of foreign investment in American business enterprise, the United Kingdom, Japan, and Canada are the big three (Herr, 1989, pp. 22 30). The United Kingdom accounted for 33.1 percent of total foreign investment in American business enterprise, while Japan accounted for 21.8 percent, and Canada accounted for 16.0 percent (Herr, 1989, pp.. 22 30).
Uneasiness is often expressed over the acquisition of American real estate by Japanese investors (Bergsman, 1991, p. 51; Hemmerick, 1990, p. 36; Tsui, 1990, p. 40). Whether one should feel uneasy about the level of Japanese investment in American real estate is a contentious issue. ...