This research examines the issue of foreign investment in the United States (US). The focus of the research is on the extent and nature of foreign investments in the country, and on the effects of such investments on the American economy.
THE EXTENT AND NATURE OF FOREIGN INVESTMENT IN THE UNITED STATES
The great hue and cry with respect to foreign investment in the US emphasizes foreign acquisition of American business enterprises (Levine, 1989; Gilder, 1990). In actual fact, how ever, foreign investment in American financial instruments dwarfs that in business enterprise and real property (Herr, 1989; Standard & Poor's, 1990). In 1988, the last full year for which data are readily available, foreign investment in American business enterprise totalled $65.0 billion, while that in the capital markets soared to $293.9 billion four and one half times foreign investment in American business enterprises (Herr, 1989; Standard & Poor's, 1990).
A comparison of foreign investment in American business enterprises, with that in American capital markets for the 1984 1988 time period is presented in Table 1, which may be found on the following page. As the data presented in the
table indicate, foreign investment growth in the financial mar kets has been both larger and more predictable than that in business enterprise.
Comparison of Foreign Investment in American Business
Enterprise with Foreign Investment in American Financial Markets1984 1988 ($, billions)
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Year Business Financial
1984 15.2 128.6
1985 23.1 207.8
1986 ...