Published by the United Nations Conference on Trade and Development - UNCTAD
The Universe of the
Largest Transnational Corporations
2007
A UNITED NATIONS Publication
This publication is part of a new series of current studies on FDI and development
published by UNCTAD. The series aims to contribute to a better understanding of how
transnational corporations (TNCs) and their activities impact on development. The present
study quantifies and analyses the past and current trends on the degree of internationalization
of the largest TNCs as well as TNCs from developing economies. It aims at stimulating
discussion and further research on the subjects addressed.
The study was prepared by J. François Outreville under the overall guidance of Anne
Miroux and Hafiz Mirza. Jovan Licina provided research assistance, Katia Vieu provided
secretarial assistance and desktop publishing was done by Teresita Ventura.
The text benefited from comments and feedback by Torbjörn Fredriksson, Masataka
Fujita, Jeremy Clegg, Kalman Kalotay, Guoyong Liang, Michael Lim, Nicole Moussa, Shin
Ohinata and Thomas Pollan.
Contents:
Acknowledgements
Executive summary
TNCs comprise firms from developed countries and, increasingly, developing
countries as well. However, when assets, sales and employment of firms from developing
economies are compared with those of their counterparts from developed countries, it is clear
that the degree of internationalization of the former is lower. An analysis of the evolution of
the composition of the world’s top 100 largest TNCs and top 50 TNCs from developing
economies shows how the geographical and sectoral components have evolved and how some
developing economies have emerged as significant actors in international production.
I. Introduction
II. The universe of the largest TNCs: 2004 snapshot
The universe of TNCs is large,
diverse and expanding. By the early 1990s,
there were an estimated 37,000 TNCs in
the world, with 170,000 foreign affiliates.
Of these, 33,500 were parent corporations
based in developed countries. Today, there
are an estimated 77,000 TNCs in the
world, with more than 770,000 foreign
affiliates. These affiliates generated an
estimated $4.5 trillion in value added,
employed some 62 million workers and
exported goods and services valued at
more than $4 trillion (UNCTAD, 2006).
a. The top 100 TNCs
b. The top 50 TNCs from developing economies
c. TNCs from Central Europe, South-East Europe and the
Commonwealth of Independent States
III. The growing importance of TNCs over the period 1993–2003
The largest 100 TNCs ranked by
foreign assets had about $3.4 trillion in
global assets in 1993, of which about $1.3
trillion was held outside their respective
home countries. These firms accounted for
an estimated one third of the combined
outward FDI of their countries of origin.
All were headquartered in developed
countries and 85 per cent originated from
the Triad. In 2003, 85 per cent of the top
100 TNCs were still headquartered in the
Triad, but came from 19 countries instead
of 12 in 1993.
a. The top 100 TNCs from 1993 to 2003
b. The top 50 TNCs from developing economies, 1993-2003
c. Performance indicators
IV. Measures of size and concentration
The most widely used indexes are the
k-firms concentration ratio (CRk) and the
Herfindhal (or Herfindhal–Hirschman)
Index (H) measured by the sum of market
shares ( i) of all n firms (box 2). We can
apply these measures to the top 100 firms
for the largest TNCS and the top 50 firms
for developing economies.
Casual observation reveals that the
importance of the five and 10 largest TNCs
among the world’s 100 largest have remained
relatively stable over time. In contrast, the
concentration ratio of the top-ranked firms in
the 50 TNCs based in developing economies
has evolved over time, resulting in more and
more concentration
V. The transnationality index over the period 1993-2003
a. TNI values over the period 1993-2003
b. Evolution by region and country
c. Shifts across sectors
VI. How transnational are TNCs?
a. The geographical extensity dimension
b. A graphical approach to transnationality
c. Other perspectives
VII. Most favoured Locations by TNCs
VIII. Conclusions
IX. References
X. Annexes
Boxes
1. The largest TNCs in the World Investment Report
2. How to measure market concentration of firms?
3. How to measure the average TNI?
4. Selected TNCs from developing economies
5. The motor vehicle industry: Ford and Toyota, two distinct expansion strategies
6. A simplified model of location-specific advantages
Figures
1. The largest 100 non-financial TNCs, foreign assets, foreign sales and foreign
employment, 1990-2003
2. The top 50 TNCs based in developing economies, foreign assets,
foreign sales and foreign employment, 1995-2003
3. The sales-to-assets ratio of the largest TNCs, 1993-2003
4. The sales-to-employment ratio of the largest TNCs, 1993-2003
5. Average TNI, 1993-2003
6. Regional distribution of the affiliates of the largest 100 TNCs
Tables
1. Snapshot of the largest TNCs: assets, sales and employment. 2004
2. Performance ratio for a subset of TNCs, 1993 and 2003
3. Ranking the largest TNCs by foreign sales and foreign employment, 2003
4. K-firms concentration ratios, 1992-2003
5. Herfindhal index and Number Equivalent, 2003
6. Top 10 most transnational firms by country of origin, 1993, 1998 and 2003
7. Country composition of the world's top 100 TNCs by transnationality
index and number of entries, 1993, 1998 and 2003
8. Composition of the top 50 by region and by transnationality index,
number of entries and number of countries, 1993, 1998 and 2003
9. Industry composition of the top 100 TNCs, 1993, 1998 and 2003
10. Industry composition of the top 50 TNCs, 1993, 1998 and 2003
11. Rank correlations among the transnationality indices
12. The 50 most transnational TNCs, ranked by the surface of the
quadrilateral calculated with four measures of transnationality
13. Distribution of the locations of affiliates of the largest TNCs by region, 2003
14. Regional composition of directors on the boards of 42 of the
largest 100 TNCs, grouped by home region/country, 2003
15. Rank correlations between countries popularity rank,
size and good governance
Box figure
4.1. The TNI value of selected TNCs from developing economies, 1993-2003
Box tables
5.1. Ford Motor and Toyota: data for 2004
6.1. Estimation results of the model with Two-Stage Least Squares
Annex tables
1. Selected indicators of FDI and international production, 1990-2003
2. The world's top 100 Largest TNCs, ranked by foreign assets, 2003
3. The world's top 100 Largest TNCs, ranked by foreign assets, 2004
4. The top 50 TNCs from developing countries, 2003
5. The top 50 TNCs from developing countries, 2004
6. The top 25 TNCs from Central Europe, 2002
7. The top 10 TNCs from South-East Europe and the CIS, 2003
8. Transnationality indices for the World's largest TNCs, 2003
9. The most favoured locations for FDI by the top 100 TNCs, 2003
Annex figure
1. Annual average growth rates of total real gross domestic product
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