THE ROLE OF MULTINATIONAL FIRMS IN ASIAN ECONOMICS

Abstract

One of the striking features of the last half of the 20th century is the emergence of the multinational industrial firm as a major element in, the world economy. In the first half of the century, international business largely consisted of trade in manufactured goods and raw materials along with a substantial amount of investment in petroleum and mining. Although these activties have continued on a large scale since World War II, they have been overtaken in magnitude by direct investment in manufacturing facilities by multinational firms and the complex distribution and financial structures supporting their in qustrial operations. While precise current data are not available, it appears that in 1970 the assets of these corporations totaled from S 110 to S 120 billions and they account for around S200 billion of sales per year. This is a tremendous volume of economic output exceeded in magnitude only by the gross national product of two countries the United States and Russia. Furthermore, the growth of the multinational firms seems to be in a general range of 10% per year, significantly greater than the overall growth of the world economy, so that their proportionate role is increasing steadily. According to one prediction 75% of world GNP will be controlled by multinational firms by 1990. I suspect this is an extreme figure but it accurately predicts the future importance of these firms.