EC1111 - International Economic Policy Seminar 4 Vinay P. Nundlall Question 1 The Table below shows the 10 biggest multinational corporations by size of Foreign Assets (in millions of USD). Sales figures are also in millions of USD. a) Calculate the Transnational Index for each of these ten companies Assets Sales Employment Corporation Royal Dutch Shell plc Toyota Motor Corporation BP plc Total SA Anheuser-Busch InBev NV Volkswagen Group Chevron Corporation General Electric Co Exxon Mobil Corporation Softbank Corp Home economy United Kingdom Japan United Kingdom Industries France Belgium Germany Motor Vehicles United States Industries United States Machinery United States Industries Japan Industry Mining, quarrying and petroleum Motor Vehicles Petroleum Refining and Related Petroleum Refining and Related Industries 1 Food & beverages 208 012 258 381 Petroleum Refining and Related Industrial and Commercial Petroleum Refining and Related 165 969 Telecommunications 145 611 Foreign 349 720 303 678 235 124 233 217 197 254 189 116 178 525 Total 411 275 435 958 263 316 243 468 431 888 192 093 260 078 365 183 70 352 330 314 121 881 220 296 Foreign 152 018 173 529 140 683 110 255 39 507 54 160 Total 233 591 67 000 254 753 148 941 183 008 141 526 45 517 240 366 110 484 123 692 218 608 82 166 45 324 Foreign 43 598 74 500 70 496 163 177 346 715 28 704 191 000 35 725 42 032 Total 92 000 348 877 102 168 206 633 626 715 55 200 295 000 71 100 63 591
b) What does the selection of these ten companies reveal about the characteristics of multinationals? c) Rio Tinto, a UK company that is involved in Mining, Quarrying and Petroleum, has the following figures: Assets Sales Employment Foreign Total Foreign Total Foreign Total 89177 89263 33429 233781 50531 51018 Calculate Rio Tinto's Transnational Index and comment on it, relating it to the theories of MNC's we discussed in the lecture. Question 2 List some reasons why governments of developing countries would want to attract FDI. What initiatives do these governments take? Question 3 Think about what type of FDI is more likely to be a success to all parties concerned in a country like Singapore. On the other hand, what type of FDI is more likely to be a success in a country like Sudan? Question 4 Are MNC's (from wealthy countries) good or bad for LDC's and developing countries? Discuss. 2