Protectionism and Japanese direct investment in the United States

Abstract

This paper generates predicted probabilities of the International Trade Commission's affirmative decisions in Japanese dumping cases to determine its influence on the level of direct investment in the United States. The empirical results suggest that Japanese direct investment in the United States is influenced by the state of the economy and the likelihood of protectionist action. These results lend credence to the internalization theory of direct foreign investment and have direct implications for U.S. commercial policy.