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Labour Organization

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Workers' Activities

Multinational Corporations

Largest corporations

Geographical distribution of largest companies

Most of the largest companies, by revenue, are American or Japanese. In 1996, 162 of the 500 largest companies globally were from the United States, and 126 from Japan. Only a few of the largest companies are from developing countries. An exception is China, which has three entries in the top 500 list (Fortune Magazine, Top 500 and Biggest revenues and increases in revenues:

Measured by foreign assets, the distribution of the largest companies looks very much the same. Most of the top 100 companies with largest foreign assets are from the United States, Japan, the United Kingdom, France and Germany. In this list, Japanese companies are not as prominent. 

In 1995, the list of the top 100 transnational corporations (TNCs), measured by foreign assets, included two companies from developing countries for the first time. These were Daewoo and Venezuela (oil company). Total foreign assets of the top 100 TNCs in 1995 amounted to $1.7 trillion, while total foreign sales were $2 trillion, and total employment 5,800,000. 

Concentration of wealth

In 1996, the total revenues of the 500 largest companies globally were $11.4 trillion, total profits were $404 billion, total assets were $33.3 trillion, and the total number of employees was 35,517,692. The top ten companies accounted for 11.7% of the total revenues of the top 500, 15% of profits, and 13.6% of employment, according to Fortune Magazine.

America was home to 31 of the 50 most profitable firms, and seven of the top ten. The most profitable, however, was Shell (the Netherlands) – with profits of $8.9 billion. Shell's profits increased by 28.7% over 1995.

In 1996, the top 500 companies did not get bigger, they got richer. Their profits increased by 25.1%, while revenues increased only by 0.5%, assets by 3.5%, and the number of employees by 1.1%.

Only in Western Europe and United States largest companies are top MNCs

Most of the largest American and European companies in terms of revenues are also the largest in terms of foreign assets. The largest American companies, by revenue, are GM, Ford and Exxon. By foreign assets, the largest American companies are Ford, GE, Exxon and GM (data of the United Nations Conference on Trade and Development, UNCTAD).

Shell, which is the only European company among the ten largest by revenues, also had the largest foreign assets ($79.7 billion) in 1995 (Fortune Magazine and UNCTAD).

Compared to their revenues, large Japanese companies have fairly modest foreign assets. For example, Mitsui had foreign assets of $16.6 billion, Itochu $15.1 billion, Marubeni $13.4 billion, Sumitomo $12.0 billion, and Toyota $36.0 billion in 1995 (UNCTAD).

Manufacturing employs more abroad than services

The largest employers are United States companies. The service industries are well represented among these companies, and the largest employer is the United States Postal Service. But compared to service companies, manufacturers employ many more people abroad. According to UNCTAD, the largest employers outside their home countries in 1995 were Unilever (276,000), GM (252,699), Philips (221,000), Nestle (213,637), ABB (196,937), Siemens (162,000), BAT (155,162), PepsiCo (142,008), and McDonalds (125,000).

Largest by revenues

$ millions 1996
$ billions
General Motors Corporation 168,369 54.1 228.0
Ford Motor Company 146,991 69.2 238.5
Mitsui & Co., Ltd. 144,943 16.6 68.5
Mitsubishi Corporation 140,204 - 79.3
Itochu Corporation 135,542 15.1 72.0
Royal Dutch/Shell Group 128,174 79.7 117.6
Marubeni Corporation 124,027 13.0 24.4
Exxon Corporation 119,434 66.7 91.3
Sumitomo Corporation 119,281 12.0 50.7
Toyota Motor Corporation 108,702 36.0 118.2

Biggest Employers

United States Postal Service 29 887,546 not available
Wal-Mart Stores, Inc. 11 675,000 not available
General Motors Corporation 1 647,000 252,699
PepsiCo, Inc. 86 486,000 142,008
RAO Gazprom 146 398,600 not available
Siemens AG 25 379,000 162,000
Ford Motor Company 2 371,702 103,334
United Parcel Service of America, Inc. 147 336,000 not available
Sears, Roebuck & Company 61 335,000 not available
Hitachi, Ltd. 16 330,152 80,000

Sources: Foreign assets and foreign employment from UNCTAD. Rest from Fortune Magazine

See also the Fortune Mazatine's lists of the largest companies in aerospace and airlines, banks, building, chemical, computer, electronics, energy, engineering, food and beverages, insurance, metal, mining and oil production, motor, telecommunications and trade (

Cross-Border Mergers and Acquisitions

Global developments

In contrast to the 1950s and 1960s, when greenfield FDI was the most popular method of market entry, cross-border mergers and acquisitions have become an increasingly important means of entering foreign markets since the mid-1980s. 

According to UNCTAD, the total value of worldwide cross-border mergers and acquisitions rose in 1996, for the sixth year running. Cross-border merger and acquisition sales totaled $274.6 billion in 1996. Most of these were majority ownership sales (UNCTAD).

Regional developments

Most sales and purchases of companies take place within developed countries. But developed countries sell less than they buy, and the difference between the purchases and sales has grown in the 1990s. Conversely, developing countries sell more than they buy, and this difference has also grown in this decade. 

In 1996, purchases of companies by developed countries accounted for $239.1 billion, and sales $186.4 billion. Corresponding figures for developing countries are $32.8 billion and $86.4 billion.

Within developed countries, the largest net purchasers are found in Western Europe. Since 1993, their purchases have increased continuously in relation to sales. In absolute terms, purchases started to increase in 1992. Main target countries are the UK and France, and main bidding countries are the UK, Germany and the Netherlands. 

North America has become as popular as Western Europe for foreign predators. US companies attracted a record $68.03 billion in mergers and acquisitions from abroad in 1996, up from $61.42 billion in 1995. Foreign investors realized 16 mega-deals in the US, of which 11 were made by investors from Western European countries. (KPMG, Annual Survey, KPMG is a business advisory firm operating in 155 countries. Its name derives from the initials of its principal founders: Klynveld, Peat, Marwick and Goerdeler.)

All developing regions are primarily targets for international companies. In the Asia-Pacific region, which recorded $16.4 billion in deals in the first half of 1997, China remains a prime target for international companies. Within China, the Hong Kong Special Administrative Region exerts a powerful pull. Australia, the Phillipines and Indonesia also continued to be attractive to foreign investors. Patterns in the Asia-Pacific also reflect the fact that countries in the region purchase heavily from each other. (See KPMG Asia Pacific Survey)

Foreign deals in Central and Eastern Europe rose to $8.2 billion in the first half of 1997, up from $2.3 billion in the second half of 1996. Both Kazakhstan and Russia achieved substantial increases in the value of inward deals, with continuing interest in Poland.

Countries in Latin America are increasingly popular with foreign corporate investors, with Brazil, Venezuela, Argentina and Mexico the principal recipients of $16.5 billion in inward corporate investment in the first half of 1997. (KPMG, Annual Survey)

Average value of cross-border deals

The average value of individual deals has risen in the 1990s. In 1996, the number of deals decreased, but their total value increased. This is in contrast to 1992-1995, when both the number and total value of transactions increased. Consequently, in 1996 the average value of deals rose more than in previous years. Average value was $37 million in 1995, and $45 million in 1996. Over the period 1990-1996, the average was $34 million.

The average purchase value curves of the United States and Western Europe are almost the same as the worldwide curve. This is natural, because these regions are the major purchasers. The Western European curve is not presented in the accompanying graph, because it would obstruct the "all countries" and United States curves. (See tables on cross-border merger and acquisition purchases in Asia Pacific countries, Latin American countries, Central and Eastern European countries, North American countries and Western European countries)

Transactions are largest in the energy sector. In 1996, the average value of cross-border deals in the production and distribution of energy was $175 million, and $98 million in the extraction of mineral oil and natural gas. The third largest average value was in postal services and telecommunications.

In their purchases, North American and Western European companies concentrated on different industries in 1996. North America was the largest purchaser of energy companies ($14.43 billion), while Western Europe is the largest purchaser of postal and telecommunications companies ($10.43 billion). (See table on cross-border merger and acquisition purchases by industry, 1996)

Average transaction values continued to increase in the first half of 1997. The value of worldwide cross-border mergers and acquisitions in this period was $130.1 billion, compared with $155 billion in the second half of 1996. However, the total number of deals continued to decline, falling from 3,100 in the first half of 1996, to 2,800 in the second half of 1996, and to 2,400 in the first half of 1997. Clearly, the average value of cross-border investments has risen significantly. (See KPMG Annual Surveys)

Intrafirm Trade

Intra-firm trade plays a critical role in the operations of multinational companies. It may help an MNC to reduce costs, such as the distribution of goods or acquisition of inputs abroad, or it may help integrate production processes on a global scale. Intra-firm trade may respond differently to changes in economic conditions than trade between unrelated parties. For example, it may – at least in the short term – be more insulated from competitive forces in certain markets, or from overall changes in prices, exchange rates, or general economic conditions. Furthermore, prices that govern intra-firm trade – often termed "transfer prices" – may have their own unique characteristics and determinants.

Statistics on intra-firm trade are largely missing. An exception is the United States, which is the home country of most of the world's largest multinationals. The Bureau of Economic Analysis (BEA) has detailed statistics on US multinationals' operations and on foreign multinationals' operations in the US, including intra-firm trade.

Value of intrafirm trade of United States multinationals and foreign multinationals in United States

Although fluctuating moderately during the past two decades, the share of intra-firm trade – both by United States MNCs and by foreign MNCs – in US exports and imports of goods have changed very little. For both exports and imports, intra-firm trade has mainly consisted of shipments from parents to their affiliates, rather than shipments from affiliates to their parent companies. This trend is for both US and foreign multinationals. (Bureau of Economic Analyses (BEA), United States Intra-Firm Trade in Goods)
The proportion in total imports of goods to the United States that is accounted for by intra-firm imports of US multinationals has consistently been smaller than the corresponding share of exports. Intra-firm exports of United States MNCs have accounted for 21-26% of total United States exports of goods, while imports have accounted for 15-18%. 

US intra-firm exports of foreign MNCs have accounted for about 10% of total US goods exports since 1977; this share has fluctuated between 7% and 12%. US intra-firm imports of foreign MNCs have accounted for a much larger share of total United States goods imports since 1977 – about 20% or more. The share of imports increased substantially in 1984-1990, from 21% to 28%. Like exports, a very large proportion of the US intra-firm imports of foreign MNCs has been accounted for by Japanese-owned affiliates. 

Value of trade associated with United States multinationals

In 1995, trade associated with US multinational corporations – trade involving United States parents, their foreign affiliates, or both – accounted for 62% of all US exports of goods and for 39% of all US imports of goods. A substantial share of the remaining US exports and imports of goods is associated with affiliates of foreign companies in the United States. In 1995, 23% of US exports of goods and 34% of US imports of goods were associated with such affiliates. (BEA, United States Multinational's Operations in 1995)


The share in total US exports and imports accounted for by multinationals – both associated and intra-firm trade – has changed very little. Associated exports of MNCs declined from 77% in 1982 to 62% in 1995. Associated imports declined from 50% in 1982 to 39% in 1995.

The share of intra-MNC-trade as a total of MNC trade is massive, both in exports and imports. Units of multinational corporations buy from each other almost as much as they buy from outside sources.

Of the $363 billion in exports of goods associated with US multinational corporations, 41% represented trade between US parents and their foreign affiliates (intra-MNC trade), while 59% represented trade with other parties. Of the $213 billion in trade with other parties, 88% were exports shipped by US multinationals to foreigners other than their foreign affiliates, and 12% were exports shipped to foreign affiliates by entities in the US other than their parent organizations.

Of the $288 billion in imports of goods associated with US multinational corporations, 44% represented intra-firm trade, and 56% represented MNC trade with other parties. Of the $163 billion in trade with other parties, 83% were imports shipped to US multinationals by foreigners other than their foreign affiliates, and 17% were imports shipped by foreign affiliates to entities in the US other than their parent organizations.

Composition of intrafirm trade

The intra-firm trading patterns of US and of foreign MNCs in the United States are fundamentally different in terms of form and industry composition. The intra-firm trade of US multinationals reflects an international division of manufacturing production between affiliated parts of the MNC. For both exports and imports, most of this trade is between United States manufacturing parents and their foreign manufacturing affiliates. The intra-firm exports to these manufacturing affiliates have mainly consisted of materials and components for further processing or assembly. (Data on the intended use of imports into the United States from these foreign affiliates are not available.)

In contrast, the intra-firm trade in the United States of foreign MNCs is largely connected with distribution and marketing activities. For both exports and imports, US wholesale trade affiliates account for most of this trade. Imports by these affiliates from their foreign parent organizations consist almost exclusively of finished goods for resale. (Data on the intended use of exports by these affiliates are not available.) (BEA, United States Intrafirm Trade in Goods)

Intrafirm trade's share in different regions

In 1992, the share of intra-firm exports in overall US exports varied widely according to country of destination. For example, among the top six US export markets – Canada, Japan, Mexico, the United Kingdom, Germany, and "Taiwan, China" – the intra-firm share ranged from 70% for Japan to 12% for "Taiwan, China". In addition, the proportion of intra-firm trade was particularly high for Switzerland (74%) and Russia (64%). For 24 of 62 countries included in available statistical information, the share of intra-firm exports was less than 10%. (BEA, United States Intrafirm Trade in Goods)

The share of intra-firm trade in overall US imports also varied substantially by country. Among the top six source countries for imports into the United States – Canada, Japan, Mexico, Germany, China, and "Taiwan, China" – the share ranged from 71% for Japan to less than 10% for China and "Taiwan, China". For Germany, the share was 61%. In addition to Japan and Germany, intra-firm trade accounted for a majority of United States imports from seven other countries; the share was highest for imports from Switzerland (76%). In addition to China and "Taiwan, China", intra-firm trade accounted for less than 10% of United States imports from 19 other countries. (BEA, United States Intrafirm Trade in Goods)

Intra-firm trade's relation to trade partners income level

Intra-firm transactions – particularly shipments flowing from parent companies to their affiliates – tend to be relatively more important in US trade with higher-income countries. Among 59 major US trading partners, there is a pronounced tendency for the proportion both of intra-firm exports of US MNCs in total exports and of intra-firm imports of foreign MNCs in total imports to increase with the per-capita gross national product (GNP) of the trading partner. The average share of US exports accounted for by intra-firm trade of US MNCs increases from 4% for the 11 trading partners with per-capita GNP of less than $1,000, to 23% for the 14 trading partners with per-capita GNP of $20,000 or more. The average share of US imports accounted for by intra-firm trade increases from less than 3% for the 11 countries with the lowest per-capita GNP, to 35% for the 14 countries with the highest per-capita GNP. (BEA, United States Intrafirm Trade in Goods)

Cross-border interfirm agreements

Cross-border agreements between firms based in different countries have become increasingly important complements to traditional FDI activities, with the range of such agreements growing ever wider. They include arrangements for joint ventures, licensing, subcontracting, franchising, marketing, manufacturing, research and development (R&D), and exploration agreements. These may be equity-based, or may entail no equity participation. (UNCTAD, World Investment Report 1997.)

The number of these agreements (apart from strategic R&D partnerships) increased from 1,760 in 1990 to 4,600 in 1995. Most cross-border inter-firm agreements concluded during the period 1990-1995 involved firms from the three major industrial centres: firms from European Union countries participated in 40% of such agreements, Japanese firms in 38%, and United States firms in 80%. (UNCTAD, World Investment Report 1997.)
Developing countries are becoming increasingly involved in cross-border agreements, especially in those that are equity based. The number of new cross-border inter-firm agreements with developing country participation increased from around 440 in 1990 to some 2,120 in 1994, but fell to 560 in 1995. Their share in the total number of cross-border inter-firm agreements increased on average from 27% in 1990-1992 to 35% in 1993-1995. In contrast, the corresponding share of Central and Eastern European participation in cross-border agreements was halved over the same time frame. (UNCTAD, World Investment Report 1997.)
The number of cross-border strategic R&D partnerships increased from nearly 280 in 1991 to 430 in 1993. The upward trend continued in 1994, but faltered in 1995. Most cross-border non-equity strategic R&D partnerships have been between firms from developed countries. In 1995, out of the total number of such agreements for which the countries of the participating firms are known, 86% had at least one United States partner, 42% had at least one partner from the European Union, and 31% had at least one Japanese partner. However, developing-country firms are also becoming more involved in these partnerships. The participation of developing countries in the total number increased from 3% in 1989 to 13% in 1995. (UNCTAD, World Investment Report 1997.)

Globalization and Workers' Rights


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