ABSTRACT
In the 1970s, international banks were the most important players in the international capital. In order to maintain their share in the international market, Japanese corporations are increasingly shifting their production bases to overseas countries with lower wage rates. International investments were nothing but large-scale purchases of United States bonds—both treasuries and corporates. Investors are responding positively to new international equity issues, partially reflecting the buoyancy of the secondary markets. The composition of foreign direct investment flows into developing countries is also strongly biased toward manufacturing. Companies face ever-increasing international competition and try to take advantage of the growing opportunities offered by the international market. Internationalization of large manufacturing of finished goods, including vehicles, electronic equipment, and machinery, poses particular challenges for their suppliers. International mergers and acquisitions are some of the most important forms of capital flows.
