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Multinational corporation

A multinational corporation (MNC) – also called a multinational enterprise (MNE), transnational enterprise (TNE), transnational corporation (TNC), international corporation, or stateless corporation,[1] with subtle but contrasting senses – is a corporate organization that owns and controls the production of goods or services in at least one country other than its home country.[2][3] Control is considered an important aspect of an MNC to distinguish it from international portfolio investment organizations, such as some international mutual funds that invest in corporations abroad simply to diversify financial risks. Black's Law Dictionary suggests that a company or group should be considered a multinational corporation "if it derives 25% or more of its revenue from out-of-home-country operations".[4]

Most of the largest and most influential companies of the modern age are publicly traded multinational corporations, including Forbes Global 2000 companies.

(originally Anglo-Persian; now BP)

Anglo-Iranian Oil Company

Royal Dutch Shell

(SoCal, later Chevron)

Standard Oil Company of California

(now merged into Chevron)

Gulf Oil

(now merged into Chevron)

Texaco

(Esso, later Exxon, now part of ExxonMobil)

Standard Oil Company of New Jersey

(Socony, later Mobil, now part of ExxonMobil)

Standard Oil Company of New York

and exporting goods and services

Importing

Making significant investments in a foreign country

Buying and selling licenses in foreign markets

Engaging in — permitting a local manufacturer in a foreign country to produce its products

contract manufacturing

Opening manufacturing facilities or assembly operations in foreign countries

A multinational corporation (MNC) is usually a large corporation incorporated in one country which produces or sells goods or services in various countries.[24] Two common characteristics shared by MNCs are their large size and centrally controlled worldwide activities.[25]


MNCs may gain from their global presence in a variety of ways. First of all, MNCs can benefit from the economy of scale by spreading R&D expenditures and advertising costs over their global sales, pooling global purchasing power over suppliers, and utilizing their technological and managerial experience globally with minimal additional costs. Furthermore, MNCs can use their global presence to take advantage of underpriced labor services available in certain developing countries, and gain access to special R&D capabilities residing in advanced foreign countries.[26]


The problem of moral and legal constraints upon the behavior of multinational corporations, given that they are effectively "stateless" actors, is one of several urgent global socioeconomic problems that has emerged during the late twentieth century.[27]


Potentially, the best concept for analyzing society's governance limitations over modern corporations is the concept of "stateless corporations". Coined at least as early as 1991 in Business Week, the conception was theoretically clarified in 1993: that an empirical strategy for defining a stateless corporation is with analytical tools at the intersection between demographic analysis and transportation research. This intersection is known as logistics management, and it describes the importance of rapidly increasing global mobility of resources. In a long history of analysis of multinational corporations, we are some quarter-century into an era of stateless corporations - corporations that meet the realities of the needs of source materials on a worldwide basis and to produce and customize products for individual countries.[28]


One of the first multinational business organizations, the East India Company, was established in 1601.[29] After the East India Company, came the Dutch East India Company, founded on March 20, 1603, which would become the largest company in the world for nearly 200 years.


The main characteristics of multinational companies are:

Alternatives and arrangements[edit]

For small corporations, registering a foreign subsidiary can be expensive and complex, involving fees, signatures, and forms;[41] a professional employer organization (PEO) is sometimes advertised as a cheaper and simpler alternative,[41] but not all jurisdictions have laws accepting these types of arrangements.[42]

Multinational enterprise[edit]

"Multinational enterprise" (MNE) is the term used by international economist and similarly defined with the multinational corporation (MNC) as an enterprise that controls and manages production establishments, known as plants located in at least two countries.[47] The multinational enterprise (MNE) will engage in foreign direct investment (FDI) as the firm makes direct investments in host country plants for equity ownership and managerial control to avoid some transaction costs.[48]

Financial risk management § Corporate finance

Globalization

Global workforce

List of multinational corporations

Transnational Corporations Observatory

World economy

Multinational tax haven

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Chandler, Alfred D. and Bruce Mazlish, eds. (2005).

Leviathans: Multinational Corporations and the New Global History

Chandler, Alfred D. et al. eds. Big Business and the Wealth of Nations (Cambridge University Press, 1999)

excerpt

Chernow, Ron. The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance (2010)

excerpt

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excerpt

Dunning. John H. and Sarianna M. Lundan. Multinational Enterprises and the Global Economy (2nd ed. 2008), major textbook

1993 edition online

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online

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JSTOR

Jones, Geoffrey. Multinationals and Global Capitalism: From the Nineteenth to the Twenty-first Century (2005)

Jones, Geoffrey. (2000).

Merchants to multinationals : British trading companies in the nineteenth and twentieth centuries

Jones, Geoffrey, and Jonathan Zeitlin, eds. The Oxford Handbook of Business History (2008)

Jones, Geoffrey, et al. The History of the British Bank of the Middle East: Vol. 2, Banking and Oil (1987)

Jones, Geoffrey. (1995).

The Evolution of International Business

Lumby, Anthony. "Economic history and theories of the multinational corporation". South African journal of economic history 3.2 (1988): 104–124.

Martin, Lisa, ed. The Oxford Handbook of the Political Economy of International Trade (2015)

excerpt

Munjal, Surender, Pawan Budhwar, and Vijay Pereira. "". Social Identities 24.5 (2018): 548–563.

A perspective on multinational enterprise's national identity dilemma

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Tugendhat, Christopher. (Penguin, 1973).

The multinationals

Vernon, Raymond. (Harvard UP, 1977).

Storm over the Multinationals: The Real Issues

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Wilkins, Mira. " vol 2 (2009).

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Wilkins, Mira. (1964).

American business abroad: Ford on six continents

Data on transnational corporations

UNCTAD publications on multinational corporations