International Investments and the European Challenge

Abstract

The complicated pattern of foreign direct investments (FDI) is analyzed for the Single European Market. There are huge FDI flows from the USA and Japan. The Japanese are newcomers: they already made financial transactions through Luxembourg and are building up their logistic operations in the Netherlands. A new division of labor is presented, which includes the United Kingdom as a prime host country for reasons of language and low labor costs. Ireland, Catalonia, and some East German Lander may be the exception to the rule that investments are made in the core regions. A shift was seen in FDI during the 1960s to the Pacific Rim, the USA being a prime host country for FDI during the 1970s.