How investment abroad creates jobs at home.

Lately U.S. multinational companies have come under fire, particularly from labor unions, because their direct foreign investment allegedly takes jobs away from workers back home. The unions' resentment has culminated in the introduction of restrictive legislation in Congress. This article attacks that argument as well as the assertion that such investment aggravates the U.S. balance-of-payments deficit. Case examples from a Harvard Business School study, underwritten by the Department of Commerce, show that companies usually make these investments in self-defense, to protect their markets abroad. While increased competition may eventually cause a company's world market share to drop, without its foreign facilities it might very well lose its share entirely. Furthermore, shipments to these foreign plants account for an important share of U.S. exports of manufactured goods. [ABSTRACT FROM PUBLISHER]