Most investors and executives want a piece of the booming Asian market for the right reasons. With vigorous growth in the region, getting into China, India, and other countries should position companies well for the expected groundswell of shareholder value. And for many sectors, such as high technology and manufacturing, the advantages of going to Asia, particularly China, have so changed the competitive dynamics that there's little choice but to join the rush.

But the decision to go to Asia can be unsound as well. Many executives who invest in China or India believe that these markets will suddenly kick-start stalled growth at home, reviving their companies' sagging prospects. On that score, we think caution is in order, for two reasons.

First, from a growth perspective, the returns from investments in Asia just aren't going to be that large—at least over the next decade. Even under optimistic ten-year forecasts for these fast-growth markets, in most industries the real value for shareholders will still lie in the United States and Europe (Exhibit 1).

At current growth rates, corporate investment in Asia¹ will not have a tremendous...