Critics and defenders of multinational corporations often agree on at least one thing: that the activities of multinationals are creating an overwhelmingly powerful global market that is quickly rendering national borders obsolete. The authors of this book, however, argue that such expectations commonly rest on a myth. They examine key activities of multinational corporations in the United States, Japan, and Europe and explore the relationship between corporate behavior and national institutions and cultures. They demonstrate that the world's leading multinationals continue to be shaped decisively by the policies and values of their home countries and that their core operations are not converging to create a seamless global market.
With a wealth of fresh evidence, the authors show that Japanese and German multinationals, in particular, remain only weakly committed to laissez-faire policy orientations and continue to exhibit strong allegiance to national goals in such areas as investment and employment. They also bring to light the consequences of enduring differences in government policies on, for example, industrial cartels, capital markets, and research and development.
The authors agree that the world economy is becoming more complex and integrated as overt barriers to trade and investment fall away. But they conclude that the extent of this integration is decisively limited by structural divergence at the level of the firm. The book will be essential reading for those seeking to understand the growing interdependence of still-distinctive industrial societies and the wellsprings of the true global economy.

LIST OF TABLES AND FIGURES ix
PREFACE xi
CHAPTER 1 National Firms in Global Commerce 3
The Appearance of Convergence 4
Innovation and the State 6
Domestic Structures, Multinational Corporate Strategies 7
Overview of the Book 10
CHAPTER 2 States and Firms: Conventional Images, Complex Realities 11
The Nature of MNCs 11
Global-Local Politics 14
The Policy Context 18
CHAPTER 3 National Foundations of Multinational Corporate Activity (I) 22
Corporate Governance and Finance 22
Comparative Analysis of the United States, Germany and Japan, 24
CHAPTER 4 National Foundations of Multinational Corporate Activity (II) 59
Innovation Systems 60
Investment Systems 74
Structural Context and Multinational Corporate Behavior 83
CHAPTER 5 The Strategic Behavior of MNCs 84
Technology and Commerce 84
Direct Investment and Intrafirm Trade 115
Interaction of Corporate Investment, Trade, and Innovation 133
CHAPTER 6 Corporate Diversity and Public Policy 138
Globalization at Bay 138
The Politics of Deepening Economic Integration 142
Public Policy and Increasing Complexity 144
NOTES 151
SELECTED BIBLIOGRAPHY 183
INDEX 189

Paul N. Doremus is Senior Analyst (Technology Administration) in the U.S. Department of Commerce. William W. Keller is Executive Director, Center for International Studies, Massachusetts Institute of Technology. He is the author of The Liberals and J. Edgar Hoover: Rise and Fall of a Domestic Intelligence State (Princeton). Louis W. Pauly is Professor of Political Science and Director, Center for International Studies, University of Toronto. He is the author of Who Elected the Bankers? Surveillance and Control in the World Economy. Simon Reich is Professor of Public and International Affairs, University of Pittsburgh. He is coauthor of The German Predicament: Memory and Power in the New Europe.