Abstract
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.
Transnationalization focuses on the intensity of foreign activities in relation to domestic or global activities. Using the Transnationality Index (TNI) developed by UNCTAD, it is shown that the average index value for the developing economies' TNCs has increased over time and is catching up with the world's largest TNCs. Ranking the TNCs by the TNI value shows that over the past years, firms in smaller European countries have dominated the list. This is similarly true for small economies from South and South-East Asia in the list of the largest TNCs from developing economies.
One aspect of transnationality from the operations perspective, not measured by the TNI, is the geographic extensiveness or the degree to which a company's operations and interests are spread in several countries or concentrated in a few. This study presents a graphical approach to transnationality and shows how to compare different firms which dominate the top of the list of the most transnational TNCs. According to this measure, firms from the United States and Germany and firms in the pharmaceuticals industry dominate the top of the list of the most transnational TNCs.
An analysis of the information on the location of foreign affiliates provides a ranking of the most favoured locations by the largest TNCs. It shows that the United Kingdom and the Netherlands are the largest host countries. Brazil and Mexico are also among the top hosts, ahead of other developing economies. It suggests that factors such as the size of the country, human capital and also governance and economic and political stability indices have a positive impact on the choice of locations by the largest TNCs.
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