Multinational Corporations
MULTINATIONAL CORPORATION
• Multinational entities have played a role in international trade for several centuries. • Multinational operations can be traced back several centuries to the British and Dutch trading companies. • After the above declined, the European overseas investments, mainly in the extractive industries dominated international trade. • The phenomenon as it is known today is the result of the lead taken by U.S. based companies in the post World War II period. Western European and Japanese firms followed later. • By 1995 the total number of multinationals exceeded 37,000 with 206,000 affiliates around the world. They are engaged in activities ranging from extractive to manufacturing and they account for a significant share of the world's output.
DEFINITION OF THE MULTINATIONAL CORPORATION
Different terms abound for the multinational corporation. The most common of such terms are as follows:
• Global corporation • World transnational corporation • International corporation • Supernational corporation • Supranational corporation • Multinational corporation • The term enterprise is often substituted for "corporation" to refer to internationally involved entities that may not be using a corporate form. • Similarly, the multinational corporation has been defined in many different ways. • The United Nations has defined it as an enterprise which owns or controls production or service facilities outside the country in which it is based.
• Although the definition is inclined more towards the economist understanding, it captures the quantitative and qualitative dimensions of many of the other definitions.
Quantitatively, the following minimal criteria have been proposed: • The number of countries of operation is typically two, although the Harvard multinational enterprise project required subsidiaries in six or more nations. • The proportion of overall revenue generated from foreign
• Multinational entities have played a role in international trade for several centuries. • Multinational operations can be traced back several centuries to the British and Dutch trading companies. • After the above declined, the European overseas investments, mainly in the extractive industries dominated international trade. • The phenomenon as it is known today is the result of the lead taken by U.S. based companies in the post World War II period. Western European and Japanese firms followed later. • By 1995 the total number of multinationals exceeded 37,000 with 206,000 affiliates around the world. They are engaged in activities ranging from extractive to manufacturing and they account for a significant share of the world's output.
DEFINITION OF THE MULTINATIONAL CORPORATION
Different terms abound for the multinational corporation. The most common of such terms are as follows:
• Global corporation • World transnational corporation • International corporation • Supernational corporation • Supranational corporation • Multinational corporation • The term enterprise is often substituted for "corporation" to refer to internationally involved entities that may not be using a corporate form. • Similarly, the multinational corporation has been defined in many different ways. • The United Nations has defined it as an enterprise which owns or controls production or service facilities outside the country in which it is based.
• Although the definition is inclined more towards the economist understanding, it captures the quantitative and qualitative dimensions of many of the other definitions.
Quantitatively, the following minimal criteria have been proposed: • The number of countries of operation is typically two, although the Harvard multinational enterprise project required subsidiaries in six or more nations. • The proportion of overall revenue generated from foreign