New Horizons in International Business series
Edited by Alan M. Rugman and Gavin Boyd
Walid Hejazi and Marc von der Ruhr The previous chapters in this volume have mentioned a number of interesting trends in the political economy of the United States. Specifically, the role of corporations initiating structural change has been noted, and an emphasis has been placed on how technology has dramatically affected the landscape of international production. We consequently see a change in the nature of international manufacturing, an increasing role for services in many economies, and dramatic increases in financial integration. The impact of economic openness has generated substantial worldwide debate. The experience of the US in the controversy surrounding globalization has been no exception. Interestingly, amid the significant protests involving US globalization, Obstfeld (2000) notes that the openness of the US economy to international trade lags that of many smaller economies. Nevertheless, the US has become more open to both international trade and foreign direct investment (FDI) (Figure 7.1). 0.20 Percentage 0.15 0.10 0.05 0.00 1960 Imports 1970 Exports 1980 In stock 1990 Out stock 2000 Source: FDI data were obtained from the US Bureau of Economic Analysis website and the trade data were obtained from the Federal Reserve Economic Data Base website. Figure 7.1 US openness to trade and FDI (relative to GDP) 131 CHAPTER 7 27/6/03 1:23 PM Page 2 132 Alliance capitalism for the new American economy Multinational enterprises (MNEs) have played a leading role in the globalization of world markets. MNEs have many channels available to serve foreign markets: international trade, FDI, joint ventures,...
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