GLOBAL FINANCE
36
GLOBAL FINANCE
``If states are understood . . . as institutional structures or polities,
then the basic institutional structure of transnationals will be
influenced or even determined by the institutional characteristics
of states.''
Stephen Krasner
1
The United Nations estimated in 1998 that there were 53,607 multi-
national corporations (MNCs) with some 448,917 affiliated companies.
The total sales of foreign MNC affiliates actually far exceed the world's
exports and amount to around a third of total world GDP.
It is often said that the largest multinationals have GDPs bigger than
small countries; it's true. In fact, half of the largest economic units in
the world are multinationals, not countries, measured by turnover or
GDP. Only 14 nations have larger GDPs than the largest MNCs (see
Table 5.1).
Table 5.1
The top 10 multinationals by foreign assets. (Source: UNCTAD,
1998.).
Ranking by
Country
Currency
Industry
Foreign Assets
1
General Electric
US
Electronics
2
Shell, Royal Dutch
UK/Neth
Petroleum
3
Ford Motor Company
US
Automotive
4
Exxon Corp
US
Petroleum
5
General Motors
US
Automotive
6
IBM
US
Computers
7
Toyota
Japan
Automotive
8
Volkswagen Group
Germany
Automotive
9
Mitsubishi Corp
Japan
Diversified
10
Mobile Corp
US
Petroleum
As we saw in Chapter 3, until the 1980s, most MNC activity occurred
in the developed countries, with around 50% of production occurring
in the US, UK, Canada, Germany, and Holland, but the dynamism of
the newly industrialized countries (NICs) has created a host of young
