Twenty-nine of the world’s 100 largest economic entities are transnational corporations (TNCs), according to a new UNCTAD list that ranks both countries and TNCs on the basis of value added. Of the 200 TNCs with the highest assets abroad in 2000, Exxon is the biggest in terms of value added ($63 billion). It ranks 45th on the new list, making it comparable in economic size to the economies of Chile or Pakistan (table 1). Nigeria comes in just between DaimlerChrysler and General Electric, while Philip Morris is on a par with Tunisia, Slovakia and Guatemala.
The size of large TNCs – usually measured by sales – is sometimes compared to that of national economies as an indicator of corporate influence over the world economy. However, using sales to compare firms with the GDP of countries is conceptually flawed, as GDP is a value-added measure and sales are not. A truly comparable yardstick requires that sales be recalculated as value added. For firms, value added can be estimated as the sum of salaries and benefits, depreciation and amortization, and pre-tax income (1).
The value-added activities of the 100 largest TNCs have grown faster than those of countries in recent years, accounting for 4.3% of world GDP in 2000, compared with 3.5% in 1990. This suggests that the relative importance of these companies in the global economy is on the rise. On the other hand, for the top 50 TNCs, the share of value added in world GDP has declined somewhat over the past decade (table 2). In the combined top 100 list of companies and countries, 24 TNCs appeared in 1990, five less than in 2000.
