Unwanted Company

In the last quarter century, the U.S. economy has been transformed by a large inflow of direct investment from abroad. Foreign companies, mainly from Europe and Japan, have built factories and acquired U.S. firms at an ever-increasing rate. Jonathan Crystal finds inconsistencies in how American businesses have responded to this globalization of production.U.S. firms, especially multinationals, have conflicting interests regarding investment protection, Crystal shows. Many American firms, under siege from overseas competitors, have already expended considerable energy in obtaining trade protection, but they are competing not only with foreign imports but also with locally established foreign-owned firms. American businesses may favor stricter regulation of foreign companies that threaten their bottom line, but they also consider their own interests as global investors subject to retaliatory protection in other countries. Restrictions on "foreign" investment, it seems, are not so attractive when they are imposed by other countries.Unwanted Company examines the different ways in which important U.S. industries (including semiconductors, automobiles, steel, consumer electronics, telecommunications, and airlines) reacted to this new challenge. It focuses on the political responses of U.S.-owned firms to how Washington ought to regulate foreign direct investment and how it ought to treat foreign-owned firms in the United States. Some industries welcomed (or at least didn't oppose) foreign investment, whereas others sought restrictive and discriminatory policies. Crystal demonstrates how the nature of the domestic political environment shapes the translation of economic interests into policy preferences.

Crystal (political scientist, Fordham Univ.) argues that the rational choice model should be supplemented by an appreciation of political context (institutions, regulations, and ideologies) in order to fully understand the range of policy preferences across and within industries regarding incoming foreign direct investment (IFDI).... This excellent study should be of particular interest to students of international political economy. Summing Up: Recommended. Four-year college and graduate libraries and professional collections., Unwanted Company usefully draws our attention to the impact of political factors on firms' decisions to translate their desire for greater profit into preferences for supportive government action. Crystal's use of domestic institutions and norms to understand these decisions offers a promising avenue for future research, and his detailed discussions of the sectors' policy preference regarding the regulation of inward foreign direct investment provide a valuable resource for students of U.S. foreign economic policy., Jonathan Crystal explores how... U.S. industries have responded to the challenges of foreign competition, especially inward foreign direct investment.... Unwanted Company demonstrates the readiness of some U.S. businesses to the look to the government for relief when they are under pressure.

Jonathan Crystal is Associate Professor of Political Science, Fordham University.