Multinational corporation
Rio Tinto, now based in London and Melbourne, Australia, has made many acquisitions and expanded globally to mine aluminum, iron ore, copper, uranium, and diamonds.
[10] European mines in South Africa began opening in the late 19th century, producing gold and other minerals for the world market, jobs for locals, and business and profits for companies.
Therefore, the United States turned to foreign oil sources, which had a significant impact on the recovery of the West after World War II.
In August 1953, the then-prime minister was overthrown by a pro-American dictatorship led by the Shah, and in October 1954, the Iranian industry was denationalized.
Since then, industry dominance has shifted to the OPEC cartel and state-owned oil and gas companies, such as Saudi Aramco, Gazprom (Russia), China National Petroleum Corporation, National Iranian Oil Company, PDVSA (Venezuela), Petrobras (Brazil), and Petronas (Malaysia).
The rise in oil prices burdened developing countries with balance of payments deficits, leading to an energy crisis.
OPEC members had to abandon their plan of redistributing wealth from the West to the post-colonial South and invest either in foreign expenditures or ostentatious economic development projects.
The most significant contribution of this conference was the establishment of the International Energy Agency (IEA), enabling states to coordinate policy, gather data, and monitor global oil reserves.
The invasion sparked a crisis in the Middle East, prompting Saudi Arabia to request assistance from the United States.
In 2003, U.S. forces invaded Iraq with the aim of removing the dictatorship and gaining access to Iraqi oil reserves, giving the United States greater strategic importance from 2000 to 2008.
That changed dramatically after 1945 as investors turned to industrialized countries and invested in manufacturing (especially high-tech electronics, chemicals, drugs, and vehicles) as well as trade.
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.
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.
For example, Chinese domestic corporations or citizens have limitations on their ability to make foreign investments outside China, in part to reduce capital outflow.
Raymond Vernon reported in 1977 that of the largest multinationals focused on manufacturing, 250 were headquartered in the United States, 115 in Western Europe, 70 in Japan, and 20 in the rest of the world.
[30] Today multinationals can select from a variety of jurisdictions for various subsidiaries, but the ultimate parent company can select a single legal domicile; The Economist suggests that the Netherlands has become a popular choice, as its company laws have fewer requirements for meetings, compensation, and audit committees,[31] and Great Britain had advantages due to laws on withholding dividends and a double-taxation treaty with the United States.
[33] Geographic diversification can be measured across various domains, including ownership and control, workforce, sales, and regulation and taxation.
[34] In some cases, the jurisdiction can help to avoid burdensome laws, but regulatory statutes often target the "enterprise" with statutory language around "control".
[34] As of 1992[update], the United States and most OECD countries have the donot legal authority to tax a domiciled parent corporation on its worldwide revenue, including subsidiaries.
[33]: 117 As of 2019[update], the U.S. applies its corporate taxation "extraterritorially",[35] which has motivated tax inversions to change the home state.
[33]: 117 Countries generally cannot tax the worldwide revenue of a foreign subsidiary, and taxation is complicated by transfer pricing arrangements with parent corporations.
[33]: 117 For small corporations, registering a foreign subsidiary can be expensive and complex, involving fees, signatures, and forms;[36] a professional employer organization (PEO) is sometimes advertised as a cheaper and simpler alternative,[36] but not all jurisdictions have laws accepting these types of arrangements.
The actions of multinational corporations are strongly supported by economic liberalism and free market system in a globalized international society.
For the first time in history, production, marketing, and investment are being organized on a global scale rather than in terms of isolated national economies.
The other theoretical dimension of the role of multinational corporations concerns the relationship between the globalization of economic engagement and the culture of national and local responses.
For example: Ernest Dichter, architect, of Exxon's international campaign, writing in the Harvard Business Review in 1963, was fully aware that the means to overcoming cultural resistance depended on an "understanding" of the countries in which a corporation operated.
He observed that companies with "foresight to capitalize on international opportunities" must recognize that "cultural anthropology will be an important tool for competitive marketing".
[43] Sanjaya Lall in 1974 proposed a spectrum of scholarly analysis of multinational corporations, from the political right to the left.
[45] In the world economy facilitated by multinational corporations, capital will increasingly be able to play workers, communities, and nations off against one another as they demand tax, regulation and wage concessions while threatening to move.
Some negative outcomes generated by multinational corporations include increased inequality, unemployment, and wage stagnation.
