Surge of Capital Flows From Abroad
Extent of Foreign Penetration in U.S. Business
Only a few years ago a flood tide of American investments abroad brought anguished cries from Europeans who feared their national economies would be engulfed in Yankee dollars and dominated by faraway home offices. These cries have since been muffled, if not entirely silenced, by grave new economic problems on both sides of the Atlantic—and by a reverse flow of investments from overseas into the United States. This flow has risen in recent years from a trickle to a sizable current.
Foreign investment in the United States takes two forms: private “portfolio” investment in corporate and government securities, and “direct” investment by foreign companies that set up or acquire American subsidiaries. Foreign portfolio investment ...