Chapter 9: Multinationals and Home Economies

Countries like the United States, which continued investing abroad even during economic decline and political shifts.

Countries like France and Germany, which experienced periods of significant investment followed by decline.

Countries like Japan, which began investing significantly later than others due to factors like late industrialization.

Countries like the United States which maintained continuous investment despite challenges, representing a consistent global presence.

Countries like France and Germany whose investments were strong pre-1914 but then declined, showcasing a fluctuating pattern.

Countries like Japan whose investments significantly grew after achieving industrialization, demonstrating a later entry into the global investment scene.

The tendency of some countries to consistently invest abroad even during economic challenges, while others demonstrate fluctuating investment patterns.

The diverse ways countries have invested globally, categorized into those that maintain consistent presence, those with fluctuating patterns, and those who entered later due to specific factors.

The theory that a country's international investment behavior evolves over time, changing with its economic development stage.

The initial stage of a country's economic development where there's no significant foreign direct investment (FDI) in or out.

As the country's economy develops, it attracts inward FDI to support its growing domestic market and reduce costs.

The country's net inward FDI per capita begins to decline, reflecting a shift toward more outward investment.

The final stage where a country becomes a net outward investor, with its investments abroad exceeding foreign investments in its own country.

The influence of a company's home country on its international business decisions and operations.

Different models that try to explain the relationship between national differences and multinational investment, often linked to a country's developmental stage.

The model suggests that a country's competitive advantage in international trade and investment is influenced by four key factors: firm, nations, diamond, and chance.

A stage in a country's development where net inward investment per capita begins to fall due to factors like local firms improving their competitiveness and developing their own ownership advantages.

A stage where a country becomes a net outward investor, with its investment flows abroad exceeding those of foreign-owned firms in its own country, driven by strong ownership advantages.

A model explaining how a country's multinational investment patterns evolve over time, passing through various stages of development, from attracting foreign investments to becoming a significant outward investor.

The key factors influencing the competitiveness of firms in a particular country, according to Porter's model.

The presence of natural resources like minerals and climate, and created resources like infrastructure and education within a country.

The quality and quantity of demand for goods and services within a country, influencing the development of specialized industries.

The benefits firms gain from being located near other related activities, leading to specialized knowledge and innovation.

How efficiently firms organize, compete within the country, and adapt to changing conditions, influencing their overall performance.

Government policies and trade barriers can significantly impact multinational investment. For example, after World War II, US defense contracts were only awarded to firms based in the US, effectively limiting foreign companies' participation.

Industries within a country's economy can significantly influence its outward FDI. Small nations often have concentrated industries, leading to more outward FDI. On the other hand, countries with a diverse spread of industries might see less outward FDI.

The rise of large companies within an economy can lead to increased outward FDI. The UK's strong position as an investor can partly be attributed to the growing importance of large companies in its economy, particularly after the 1950s.

Import controls and strict limitations on foreign direct investment (FDI) can significantly impact a country's economic growth and development. This was seen in Japan, where the protectionist policies allowed them to develop their consumer electronics and automotive industries.

The advantages enjoyed by US firms due to US defense spending were amplified by the US government's policy of prioritizing US firms for defense contracts, limiting foreign participation in this crucial sector.

In the early 20th century, British companies gained control of the tobacco company BAT, previously owned by US firms. After World War II, Alcoa lost ownership of its Canadian affiliate, Alcan, to Canadian interests. This highlights how ownership and control over multinational companies can shift.

Large companies in small economies are more likely to invest abroad, leading to concentrated outward FDI. Conversely, countries with more diversified industrial structures may have less outward FDI.

Small economies often have unbalanced industrial structures, with some industries overly represented and others lacking. This can lead to either considerably high or low outward FDI depending on the particular combination of industries.

The tendency of some countries to consistently invest abroad even during economic challenges, while others demonstrate fluctuating investment patterns.

The initial stage of a country's economic development where there's no significant foreign direct investment (FDI) in or out.

As the country's economy develops, it attracts inward FDI to support its growing domestic market and reduce costs.

The country's net inward FDI per capita begins to decline, reflecting a shift toward more outward investment.

The final stage where a country becomes a net outward investor, with its investments abroad exceeding foreign investments in its own country.

The treaty signed in 1919 that officially ended World War I and imposed harsh penalties on Germany for its role in the conflict.

The ability of companies to invest abroad despite significant economic or political challenges.

The loss of overseas business assets due to war, nationalization, or other external factors.

The influence of a country's history and culture on its companies' international investment decisions.

The process of taking control of private property by a government, often for the benefit of the state.

A major factor influencing investment patterns, where economic development stage shapes a country's role in global investment.