No Entry: Sectoral Controls on Incoming Direct Investment in the Developed Countries

Abstract

Michael Crichton chose this bit of cautionary advice to end his bestselling novel about Japanese business perfidy in the United States.’ Not since The Jungle or perhaps Uncle Tom’s Cabin has a political polemic been as skillfully woven into so gripping a tale. A central Crichton theme, that too much of the American economy has fallen into the hands of foreigners, played to an audience already sceptical about incoming foreign direct investment (IFDI). A 1989 poll found 78 per cent of Americans favouring greater legal restriction of foreign investment in American business and real estate. Ironically, these are the same Americans whose leaders for the previous several decades had counselled Europe and the Third World that their fears of foreign investment penetration reflected little more than baseless superstition.

‘If you don’t want Japan to buy it, don’t sell it.’ — Akio Morita