Multinational Corporations

A multinational corporation (MNC) owns or controls production in more than one country. The idea is old: the English East India Company (1600) and the Dutch East India Company (1602) ran trading networks across continents and even exercised military and political power. Modern multinationals expanded after the Second World War, first mostly American and European firms, later Japanese, Korean, Chinese and Indian ones. Firms go abroad to reach new markets, secure resources, lower costs or acquire technology and talent.

Today a large share of world trade takes place within multinational networks, including trade between different branches of the same company. Supporters credit MNCs with spreading technology, management skills and jobs; critics argue they can avoid taxes, shift polluting or dangerous work to places with weaker rules and use their size to influence governments. Comparisons of company revenues with national GDPs are sometimes used to show their scale, though revenue and GDP measure different things.