In this course ‘Economics of Multinational Firms’, we are trying to understand the mechanism of how firms work, their operational methods, how to the make the decisions in such firms and to study the economics of international investment by analysing the firm level approach. In this course, we are also trying to learn what role Multinational Firms play, what actions they take to take part and how much they contribute in the Global Economy. This segment particularly deals with the Trends in such firms. To be precise, this segment is about analysing the results of the BEA operations of the Multinational Firms in USA which constitutes the foundation of this course, because, trends reveal the micro-level scenario of the impacts MNCs cause on the Economy of a nation and a World successively.
According to the Benchmark Survey of US ‘Direct Investment Board 2009’, BEA reported the region wise distributional statistics of the operations of Bank as well as Non-Bank MNCs. It has been shown statistically that the MNC growth in the first decade of 21st century has been slower than that of the previous decades. However, the faster growth in MNC were reported in emerging economies like India, Brazil, China and eastern Europe which were the children MNCs of those in USA. This article gives us the insights of how firms behave in the matter of Investments in the period of uncertainty and Economic Contractions. The statistics has proven that during 1999-2009 when it was the period of uncertainty, US MNCs continued to invest in order to survive the market competitions. This gives us one of the salient feature of MNCs in USA i.e. they are highly competitive in nature despite being aware of the market contingencies. This article also talks about changes in the value-added US parents and its foreign affiliates. It has been reported that the emerging economies like India, China and Brazil resulted in the growth of 7% while the US parent MNCs were just successful in growing 1.7%. The value added in US parents decreased as 1.7% growth in the dollar value could not keep up with the 2% growth in the prices in US.
The third article talks about the very similar aspects of the statistical analysis of the MNCs in US after 2010. In this survey, the employment status in the US host MNCs and the employment status by its foreign affiliates is the matter of sheer interest for me. It was reported by the survey that the worldwide employment went up by 0.5%. and the employment in USA went down by the same percentage value. However, the growth in the value added in the Parent MNCs was massive 11.2% in contrast to the declination in the host employment status. This deflection reflects that, the growth in the value added of the Parent MNCs in US is due to the clustered industries where the production in the financial and physical capital is demanding. For Instance, Finance and Petroleum. Living in the high-income countries is one of the reason, according to me for the hike in value adds. The affiliated in such rich countries proved it by contributing 73% of the total value adds by affiliates. So, one more thing that can be concluded from this article is, richer the country and greater the resources and manpower(employment), hike in the value adds and MNCs overall growth is almost guaranteed except in the times of economic contractions and market inconsistencies.