Foreign Spending to Buy U.S. Firms Drops

Spending by other countries to purchase U.S. companies dropped 11.4% in 1997 to $70.8 billion from a record $79.9 billion in 1996, as Japanese companies cut back sharply on their acquisitions because of economic problems at home, the Commerce Department said in an annual report. The decline was the first in five years. Japan, which was No. 1 in 1990, fell to ninth place last year as spending for U.S. acquisitions dropped from $8.8 billion to just $1.8 billion. The government said the strength of the dollar, which makes U.S. assets more expensive to foreigners, might have helped hold down demand.