unctad.org | Transnational Corporations Statistics
Transnational Corporations Statistics
 
A transnational corporation (TNC) is generally regarded as an enterprise comprising entities in more than one country which operate under a system of decision-making that permits coherent policies and a common strategy. The entities are so linked, by ownership or otherwise, that one or more of them may be able to exercise a significant influence over the others and, in particular, to share knowledge, resources and responsibilities with the others.
 
Once a TNC has been identified, it may be necessary to select the most important parent company for any given associate enterprise. Because the definition of a TNC does not specify majority control, it is possible for an enterprise to be an associate of more than one TNC. In such cases in the tables covering corporate data, enterprises have been treated as associates only of the parent with the highest percentage ownership.
 
Similarly, some TNCs are active in more than one industrial sector. Such TNCs are listed in the tables containing corporate data as being active only in the sector which is most predominant among its activities. In certain cases where a predominant activity could not be identified, the activities of TNCs have been listed as "diversified". One of the most complex problems in the compilation of the data on TNCs is the identification of holding companies. In identifying such companies, attention was paid to the strategy of each holding company, including their definition of product or service offerings. If a holding company maintains a purely financial relationship with the companies that it holds, treating the companies themselves as its product, such a holding company would be classified as a financial institution. Alternatively, if a holding company actively involves itself in the management of the companies it holds, thereby treating the goods or services produced by those held companies as its own goods or services, such a holding company would be classified as being involved in the industrial sector of the companies it holds, and ranked accordingly.
 
Another problem with the corporate data presented in the tables arises from the fact that requirements for the consolidation of financial data differ between countries. Because TNCs, by their very nature, cross borders, the degree to which the financial data of any given TNC are consolidated is often uncertain. Therefore, the data on sales or assets of a foreign affiliate in the host country are not always compiled using the fully consolidated sales or assets of all foreign affiliates of its parent company. In most cases when data are reported on assets or sales of foreign affiliates or of domestically-based TNCs, the extent of consolidation is not known.

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