unctad.org | Largest transnational corporations adversely affected by financial and economic crisis, report says
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Largest transnational corporations adversely affected by financial and economic crisis, report says

UNCTAD/PRESS/PR/2009/051
16 September 2009


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The contents of this press release and the related Report must not be quoted or
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media before 17 September 2009,17:00 [GMT]
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Geneva, 17 September 2009 - The worst global economic and financial crisis in a generation has slowed the international production of goods and services by the world´s estimated 82,000 transnational corporations (TNCs) and their 810,000 foreign affiliates, the latest World Investment Report(1) reveals.

Strong effects were felt by TNCs in 2008 and early 2009, the annual study says. Among transnational firms there were declining profits, increasing divestments and layoffs, and a number of major restructurings and bankruptcies. Nevertheless, TNCs´ foreign affiliates continue to mark their importance in the global economy, accounting for not less than 10% of world GDP and employing about 78 million people -- more than double the total labour force of a major industrialized nation such as Germany.

The World Investment Report 2009, subtitled Transnational Corporations, Agricultural Production and Development, was released today.

The report provides a special focus on the impact of the crisis on the 100 largest non-financial TNCs worldwide. Preliminary estimates reveal a marked slowdown in 2008 in the international sales and assets of these companies (table 1). UNCTAD´s World Investment Prospects Survey (WIPS) 2009-2011 provides some insight into the role of the ongoing crisis on investment flows, revealing that 85% of business executives of the largest TNCs believe that the global economic downturn has prompted cutbacks in their international investment plans.

As in previous years, UNCTAD´s list of the world´s largest 100 non-financial TNCs is dominated by manufacturing and petroleum companies (figure 2). Both of these groups have seen their fortunes change during the crisis as the demand for both manufactured goods and fuels has dropped markedly, erasing or reducing the profit margins at many of the largest companies. Overall, the profits of the largest 100 TNCs in the world fell by more than 25% in 2008. Large TNCs from developing economies likewise have been impacted, but still managed to fill a record seven positions on UNCTAD´s list of the world´s largest 100 non-financial TNCs (figure 3). TNCs from developed countries, however, still account for the largest share of the top 100 non-financial TNCs, with EU-based firms at the top of the list (57 entries), followed by the USA (20 entries) and Japan (10 entries).

Looking forward, while large TNCs appear pessimistic about global FDI prospects in 2009, they are more optimistic about 2010 and 2011. Results of the WIPS survey show that half of TNCs see their FDI expenditures exceeding 2008 levels in 2011 (figure 4). Continuing ambitions to internationalize, as shown by the survey, and a continuing urge to explore expansion possibilities in faster-growing developing and transition economies are among the drivers expected to expand FDI by TNCs worldwide in the coming years.

The World Investment Report and its database are available online at http://www.unctad.org/wir and http://www.unctad.org/fdistatistics

Downloads [PDF]: | World Investment Report 2009 (Only in English) [6514 KB, 313 Pages] | Overview in English | [931 KB, 55 Pages] Overview in French | [xx KB, xx Pages] Overview in Spanish | [xx KB, xx Pages] Overview in Russian | [585 KB, 82 Pages] Overview in Chinese | [xx KB, xx Pages] Overview in Arabic | [xx KB, xx Pages]

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ANNEX

Tables and figures

Table 1. Snapshot on the 100 largest TNCs world-wide, 2006-2007/2008

Table 1. Snapshot on the 100 largest TNCs world-wide, 2006-2007/2008
Source: UNCTAD/Erasmus University database.

Note:aIn percentage points.
2007 and 2008 data represent companies from the 2007 top 100 TNCs list. Projected 2008 data based on the rates of change observed in 90 of the top 100 TNCs with 2008 data, applied to 2007 totals. A top 100 list for 2008 will appear in WIR 2010.

Figure 2. Top 100 non financial TNCs, by industry, 2007

Figure 2. Top 100 non financial TNCs, by industry, 2007
Source: UNCTAD/Erasmus University database.

Figure 3. Top 100 non financial TNCs, by home country/region, 2007

Figure 3. Top 100 non financial TNCs, by home country/region, 2007
Source: UNCTAD/Erasmus University database.

Figure 4. Prospects for respondent companies´ FDI expenditures as compared to 2008 (per cent of responses to the UNCTAD survey)

Figure 4. Prospects for respondent companies´ FDI expenditures as compared to 2008(per cent of responses to the UNCTAD survey) 
Source: UNCTAD, WIPS 2009-2011 survey




Endnotes

1.The World Investment Report 2009: Transnational Corporations, Agricultural Production and Development (WIR09) (Sales No. E.09.II.D.15, ISBN: 978-92-1-112775-1) may be obtained from United Nations Sales Offices at the below-mentioned addresses or from United Nations sales agents in many countries. Price: US$ 95 (50% discount for residents in developing countries and a 75% discount for residents in least developed countries). This includes the book and the CD-ROM. Customers who would like to buy the book or the CD-ROM separately, or obtain quotations for large quantities, should enquire from the sales offices. Residents of countries in Europe, Africa and West Asia may send orders or inquiries to: United Nations Publication/Sales Section, Palais des Nations, CH-1211 Geneva 10, fax: +41 22 917 0027, e-mail: unpubli@un.org; and those from the Americas and East Asia, to: United Nations Publications, Two UN Plaza, DC2-853, New York, N.Y. 10017, U.S.A., telephone: 1 212 963 8302 or 1 800 253 9646, fax: 1 212 963 3489, e-mail: publications@un.org. Internet: http://www.un.org/publications






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