The Multinational Corporation

  • W. M. Scammell


In its century or so of self-conscious existence the international economy has shrunk its distances, speeded its communications, widened the scope of its goods and money markets and made the first halting steps towards international decision-making. In the public sector international action has appeared in government-negotiated financial and commercial arrangements and in the activities of international functional agencies. In the private sector national business has spawned international business through the operations of multinational enterprises — large corporations with headquarters in one country and pursuing their activities, in the manufacturing, extractive, or service fields, in several others. Such enterprises are a result of the drive of corporations to extend their international transactions within their own networks of control and influence distinct from the operations of governments in their operational areas. By nature they are large and powerful and they touch the interests of governments and international agencies at many points. Although large firms with diverse foreign interests are by no means new, the postwar period, from the fifties, has seen such growth in their numbers and influence, and they are so changing the nature of the international economy that the multinational corporation must be regarded as the most striking feature of institutional change in the world economy since the war. It is our purpose in this chapter to examine the economics and some of the political implications of this development.


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  1. 1.
    These figures are quoted in S. H. Robock and K. Simmonds, International Business and Multinational Enterprises ( Homewood: Ill., Irwin, 1973 ) p. 44.Google Scholar
  2. 1.
    For a Canadian cry of alam and warning see K. Levitt, Silent Surrender: The American Economic Empire in Canada ( Toronto: Macmillan, 1971 ).Google Scholar
  3. 2.
    See J-J. Servan-Schreiber, The American Challenge ( New York: Atheneum House, 1968 )Google Scholar
  4. and Edward A. McCreary, The Americanization of Europe (New York: Doubleday, Garden City, 1964 ).Google Scholar
  5. 3.
    For a balanced American view of the phenomenon see R. Vernon, Storm Over the Multinationals. The Real Issues ( Cambridge, Mass.: Harvard University Press, 1977 ).CrossRefGoogle Scholar
  6. 16.
    For some American firms, e.g. IBM and Kodak, the resources applied to research were equal to or greater than the gross sales of their European competitors. See K. Waltz, ‘The Myth of National Interdependence’, in C. P. Kindleberger (ed.), The International Corporation (Cambridge, Mass.: MIT Press, 1970) p. 217; and J. Dunning, ‘Technology, United States Investment and European Economic Growth’, p. 165 of the same book.Google Scholar
  7. 17.
    The estimate is that of R. Vernon and was compiled by him from IMF sources. See Storm Over the Multinationals ( New Haven, Conn.: Harvard University Press, 1977 ) p. 7.CrossRefGoogle Scholar
  8. 18.
    See, for example, C. V. Vaitsos, ‘Patents Revisited’, journal of Development Studies, vol. ix (1973).Google Scholar
  9. 21.
    The Nixon Government in 1973 and 1974 tried to reduce tax advantages accruing to multinational firms. Cf. R. Vernon, ‘Does Society Also Profit?’, Foreign Policy no. 13 (1973–4) P. 110.Google Scholar
  10. 32.
    The source for these estimates is W. K. Chung, ‘Sales by Majority-Owned Foreign Affiliates of U.S. Companies, 1975’, Survey of Current Business, vol. 57, no. 2 (Feb 1977) p. 35.Google Scholar

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© W. M. Scammell 1983

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  • W. M. Scammell

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