Search

Article Information


Cross-Investment: A Second Front of Economic Rivalry
Encarnation, Dennis J.
29/2  (Winter 1987): 20-48 *

Everyone knows that Japan has profited for more than a decade from a continuous trade surplus with the U.S. However, Japan has also become a large capital exporter--with America, previously a major capital exporter, now being a principal recipient. Japanese investments in the U.S. take many forms and have been growing rapidly. In fact, Japan has become America's third largest foreign investor. Like trade competition, this second front of economic rivalry represents an increasingly formidable Japanese challenge to U.S. business--now mounted on America's home grounds. On the other side, by 1983, only Canada and Switzerland surpassed Japan as the target for new U.S. direct investment abroad. This article examines the history and practice of cross-investment between the U.S. and Japan. The full story of cross-investment involves a larger tale, that of growing similarities and persistent differences in the government policies, industrial structures, and corporate strategies of the two countries. The growth in similarities represents an increasingly potent weapon in the arsenal of managers and policymakers in the U.S. and Japan.

 


California Management Review

Berkeley-Haas's Premier Management Journal

Published at the University of California for more than sixty years, California Management Review seeks to share knowledge that challenges convention and shows a better way of doing business.

Learn more
Follow Us