FOREIGN direct investment which I shall associate with the multinational corporation varies greatly in its prominence from country to country and sector to sector. The analytical apparatus of international trade and industrial organization supplies some hypotheses to explain this variation, but they have not been drawn together and tested competitively. The purpose of this paper is to explain statistically the substantial inter-industry variance that we observe in the prevalence of multinational corporations. In the first section I review the hypotheses that have been advanced to explain this variance. The second and third sections report tests of these hypotheses on the shares of sales held by foreign-owned enterprises in Canadian and United Kingdom manufacturing industries.

T HE successful completion of European recovery in the 1950's brought to the western industrial countries the least restricted regime of international trade and payments in many decades. Its very freedom, however, has revealed a number of problems in maintaining consistent domestic and international economic policies, and in keeping the international policies of different countries consistent with each other. Increasingly, these problems have seemed to center on the matter of international reserves and liquidity. Many plans have emerged for changing our reserves and liquidity arrangements. The variety of proposals at hand reflects more than just divergent views on how to handle a given problem. It also stems from differing diagnoses about the exact nature of the liquidity problem, differing prescriptions for related features of international economic policy, and, finally, differing hunches about the political acceptability of the changes proposed. This paper aims not at cluttering the scene with a new proposal, nor even a new summary of existing plans.1 Rather, it turns to the problem of picking among the alternatives. Once the substantive issues are settled regarding the nature of the difficulty and the future network of international monetary arrangements, then assembling the optimal plan becomes a task for the technicians. What follows is an attempt to classify, first, the diagnoses of present ills and, second, the underlying substantive issues. It is an essay, not on the efficient solution, but on the efficient search procedure.

curred in the past decade between applied microeconomists and those who study business strategy. Business strategists have cast up a series of questions for industrial economists, who have responded with numerous applications of economic theory and quantitative research methods. This interchange has been fruitful, and indeed more fruit remains for the picking. I shall argue for centering the collaborative effort on what may be called committed competition, rivalrous moves among incumbent producers that involve resource commitments that are irrevocable for nontrivial periods of time. Most concerns of business strategy are with policy choices that