5 - Globalization of Entrepreneurial Prospects: The Integration of Capital, Direct and Portfolio Investment, and Multinational Companies in Germany and the United States

Summary

Translated by Tradukas

Entrepreneurial prospects have expanded considerably since the 1970s. While companies traditionally came into contact with other countries through exports, they have increasingly established production facilities abroad. The worldwide liberalization of the flow of goods and services as well as capital transactions has led to increased business in hitherto protected markets. Accompanied by progress in communications and transport technology, this permitted and at the same time demanded exploitation of cost advantages in production and procurement available abroad. Furthermore, companies have increasingly needed to have a presence on foreign markets in order to increase their sales of advanced, high-value technological goods. Direct investments have been the most powerful motor in this process of globalization; they developed much more dynamically than international trade as a whole. As a result of globalization, multinational companies have pushed to the fore, bringing changes to the structure of international trade and creating new sources of economic power. This trend toward globalization has had a decisive influence both on the scope and the structure of the integration of capital between German and American companies.