Inward investment by Japanese manufacturing multinationals has come to have a profound influence on the UK and US economies. Focusing on the 1970s and 1980s, this study looks at the political economy of the investment location decision using an original analytical framework and four detailed case studies. In addition to the larger issues of protectionism, globalization and inter-firm competition, it investigates whether and how subnational factors can influence the specific subnational locational decision - an issue of great interest to any subnational region attempting to adapt to structural shifts in the global economy.