On Wednesday Oct. 25th.2000,at a meeting in Montreal, the finance Minister of Canada Mr. Paul Martin in his opening address to the G20 group on promoting Globalization, stated that "globalization will have a more human face with measures to ease financial crises and social safety nets to protect the poorest". The meeting concluded with all the participants agreeing on a package of measures, which they say, will lead to more financial stability in the world. From a political perspective this endorsement may seem realistic. However this futuristic goal will require more foreign direct investment from corporations and other sources of private enterprise at a time when most expatriate firms are complaining about the decline of the (R.O.A) rate of return of foreign owned companies, specifically in the U.S.A.

Firms based in one country increasingly make investments to establish and run business operations in other countries.U.S firms invested US$133 billion abroad in 1998,while foreign firms invested US$193 billion in the US.Overall world FDI flows more than tripled between 1988 and 1998,from US $192 billion to US$600.The share of FDI to G

A research done by the Bureau of Economic Analysis (BEA) provided new estimates of the rate of return for foreign -owned US nonfinancial companies that are disaggregated by industry and valued in current-period prices for the years 1988 to 1997.The new estimates. Along with company-level estimates for US owned nonfinancial US companies, were used to examine factors that help explain the low rates of return. The rate of return measure was the ( ROA) i.e. the return on assets.. This is also looked at as the ratio of profits from current production, plus interest paid to the average of beginning and end of year total assets. Also profits from current production are profits that result from the production of goods and services in the current period. Both profits and assets are valued in prices of the current period.

Profits reflect the value of inventory withdrawals and depreciation on a current-cost basis. These have been adjusted to remove the income from equity investments in unconsolidated business and the expense associated with amortizing intangible assets. Total assets reflect the current cost of tangible assets. These have been adjusted to remove assets for which the return is not included in the numerator of the ROA ratio e.g. equity investments in unconsolidated businesses and ammortizable intangible assets.

There are several other studies which indicate that there is a decline in the rate of return on Foreign Direct Inve

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