Transnational corporations such as General Motors Corp. and General Electric Co. control one-third of the world’s manufacturing output, according to a United Nations study team.
The report on world investment points out that transnationals had sales of $4.8 trillion in 1991, larger than total world trade that year and twice the sales generated by such firms in the early 1980s.
“At least 37,000 parent firms control over 200,000 foreign affiliates worldwide. Two-thirds of these parent firms-about 26,000-are from 14 major developed countries,” according to economist Persephone Economou, who worked on the report for the United Nations Conference on Trade and Development.
She said attempts by governments and trade unions to slow overseas investment are futile because companies must operate across national borders to compete in a global economy.
Charges that companies shift jobs from high-wage countries to low-wage countries are exaggerated, she said.
“Research shows that the number of jobs relocated for this purpose is small,” she said. “Labor cost differentials are often offset by differences in labor productivity.”
The report, based on 1992 figures, shows that 6 of the 12 transnational corporations with the most foreign assets are American, led by Exxon, IBM and GM. Royal Dutch/Shell, a British-Dutch firm, was ranked No. 1, with foreign assets of $69.4 billion.
American companies invested $50 billion abroad in 1993, followed by British companies, $26 billion; French companies, $21 billion; German companies, $17 billion; and Japanese companies, $12 billion.