The Internationalization of Production

The degree of internationalizaton of the enterprise or business sectors of many countries, as measured by the ratio of direct investment abroad to domestic wealth or assets, or of assets or employment abroad to that at home, has been growing over the last twenty years or more. The exception to this trend is the United States, in which the extent of internationalization, after growing until the 1970s, has stagnated or decreased somewhat. The level of internationalization of U.S. firms in the 1970s and 1980s was above that of Germany and especially above those of Japan and Korea. Canada was close to the U.S. and UK firms were by far the most internationalized. The differences among the country levels and trends seem to reflect country size and divergences between the competitiveness of countries and of their companies, including those that result from exchange-rate movements.