Theodore H. Moran

Foreign Expansion as an “Institutional Necessity” for U.S. Corporate Capitalism: The Search for a Radical Model

Is foreign economic expansion in some sense an “institutional necessity” for corporate capitalism in the United States? Is there something inherent in the internal dynamics of American capitalism that creates such strong pressures for foreign private investment that the U.S. Government must consider the creation and preservation of an international system that facilitates such expansion to be among our most vital national interests? What yardstick can measure the opportunities, the needs, die necessity of investing abroad, or tie cost and risk if tiie option of foreign private investment is threatened

International Political Risk Management : Looking to the Future

This publication is the third in a series of volumes based on the Multilateral Investment Guarantee Agency-Georgetown University Symposium in International Political Risk Management. Like its predecessors, this volume offers expert assessments of needs, trends, and challenges in the international political risk insurance industry. These assessments come from a dozen senior practitioners from the investor, financial, insurance, broker, and analytical communities. The volume leads off by examining the lessons that can be learned from recent investment losses, insurance claims, and arbitrations. It then turns to consider what the future may hold for coverage of project finance projects in emerging markets as well as recent public-private collaboration trends in the issuance of political risk insurance. It concludes by reconsidering both old and new political risk insurance products and innovations that seek to expand the tools that international investors can utilize to mitigate political risk abroad.

Grand strategy: the pursuit of power and the pursuit of plenty

What is the relationship between the pursuit of power and the pursuit of plenty? How does trade policy fit as part of a nations strategy to build larger political and security relationships abroad? When are the economic rivalries among nations most difficult to manage so as to avoid undermining the stability of the international system? This article reviews five books by grand masters of international political economy, from both the economics and the international relations/political science communities. The first and second sections introduce alternative frameworks for integrating trade policy within broader national strategy via studies by Paul Krugman and Joanne Gowa. The third section examines the challenges in designing national policies toward trade (and related areas of investment and technology) in the contemporary era, as represented in two recent volumes from the National Bureau of Economic Research (NBER), one edited by Anne Krueger and the other by Alasdair Smith and Paul Krugman.

Foreign Manufacturing Multinationals and the Transformation of the Chinese Economy: New Measurements, New Perspectives

What is the relationship between foreign manufacturing multinational corporations (MNCs) and the expansion of indigenous technological and managerial technological capabilities among Chinese firms? China has been remarkably successful in designing industrial policies, joint venture requirements, and technology transfer pressures to use FDI to create indigenous national champions in a handful of prominent sectors: high speed rail transport, information technology, auto assembly, and an emerging civil aviation sector. But what is striking in the aggregate data is how relatively thin the layer of horizontal and vertical spillovers from foreign manufacturing multinationals to indigenous Chinese firms has proven to be. Despite the large size of manufacturing FDI inflows, the impact of multinational corporate investment in China has been largely confined to building plants that incorporate capital, technology, and managerial expertise controlled by the foreigner. As the skill-intensity of exports increases, the percentage of the value of the final product that derives from imported components rises sharply. China has remained a low value-added assembler of more sophisticated inputs imported from abroad--a “workbench” economy. Where do the gains from FDI in China end up? While manufacturing MNCs may build plants in China, the largest impact from deployment of worldwide earnings is to bolster production, employment, R&D, and local purchases in their home markets. For the United States the most recent data show that US-headquartered MNCs have 70 percent of their operations, make 89 percent of their purchases, spend 87 percent of their R&D dollars, and locate more than half of their workforce within the US economy--this is where most of the earnings from FDI in China are delivered.

Strategic trade theory and the use of performance requirements to negotiate with multinational corporations in the third world: Exploring a “new” political economy of north-south relations in trade and foreign investment

The climate of foreign direct investment in the Third World shows unprecedented signs of welcome for multinational corporations: more less-developed countries (LDCs) are attempting to incorporate foreign investment into their 5-year plans than ever before; tax rates on international companies are dropping in Asia, Latin America, even Africa; governmental restrictions on multinationals are loosening in dramatic fashion. ∗ There is one exception to the liberalizing trendy however: the imposition of performance requirements on foreign manufacturing investors. ∗ These performance requirements obligate the companies to increase the domestic content of their operations, expand exports, or balance their imports and exports according to a prescribed formula. In conventional economic analysis, performance requirements of this kind (referred to as trade-related investment measures, or TRIMS, in trade negotiations) are a particularly poor policy choice: instead of helping development, they damage the prospects for g...

Toward a Multilateral Framework for Identifying National Security Threats Posed by Foreign Acquisitions: With Special Reference to Chinese Acquisitions in the United States, Canada, and Australia

This article presents a framework for differentiating between foreign acquisitions of companies that might plausibly pose a national security threat to the home country of the target acquisition and those that do not. This framework originally derives from the experience of the United States. The framework is then shown to be relevant and useful for foreign acquisitions in Canada and Australia. In each case, Chinese acquisitions of US, Canadian, or Australian firms are highlighted. The article concludes by arguing that this framework can serve as an effective nondiscriminatory basis for separating genuine from implausible national security threats from foreign acquisitions across OECD states, to include all countries around the world.

Beyond Sweatshops: Foreign Direct Investment and Globalization in Developing Countries

connected, integrated, and fast-paced environments. Work has become connected internationally while the internal bases for worker solidarity have disintegrated. Another chapter outlines the increased diversity of family circumstances in tandem with the disappearance of the single-earner-withhomemaker family, along with the difficulties and opportunities associated with increasingly demanding and flexible jobs. A chapter on communities details the well-known breakdown of many local organizations and the local bases of broader institutions, including unions, churches, civic organizations, and volunteer service groups. The main argument here is that the need for such institutions has risen while