This paper examines the implications of increasing globalisation of
stock market ownership on the economics of protection. Current data on
European, Japanese and Australian stock exchanges indicate that over
30 per cent of the stock market is foreign-owned in most cases, a large
increase on a couple of decades ago. Foreign share ownership in the USA
lags behind these levels, but is increasing fast. This degree of foreign share-
ownership is likely to change qualitatively the nature of the response of
governments to FDI and support for 'domestic' firms. In particular, two
worked examples, based upon duopoly theory, suggest that the level of
foreign share-ownership is sufficient to render protection unattractive
