How does the influence of multinational corporations manifest itself?
The slowdown in economic growth, which is observed in most countries, makes adjustments in different segments. Apart from changes in the export/import ratio, many experts fear that the influence of transnational corporations will increase, which will lead to an even greater imbalance in the world market.
The International Monetary Fund conducted a study in which experts analyzed the activities of 1 million companies from 27 countries. The purpose of such a large-scale work was to understand how corporations influence the processes in the global economy.
Experts have studied the processes in companies since the 2000s. The results showed that corporations are capable of influencing the economy, but their contribution is insignificant. However, if we do not control their influence, we may face a number of problems in the future. Therefore, it is important to introduce special measures that will help to maintain the balance.
To a greater extent, the influence of corporations and their concentration in the market can be traced to the pharmaceutical and IT industries. The concept of markup plays an important role here. Analyzing the sales value of products, we can see that the markup has increased by almost 8% since 2000 in countries with a high level of economic development, and by 2% in emerging market countries. In 10% of companies there was an increase of 30%, while the rest had less growth in value. Profit of corporations with markup increased by 50% during the period under review. In addition, companies show better productivity and have a large number of intangible assets. The companies with markup are not giants, but they hold leading positions in the market.
A small number of corporations with high rates of return and markups influence their market segment in many countries. One of the success factors of such companies is a reasonable distribution of intangible assets, optimization of production costs.
The growth of markups has also affected the investment of companies – it is decreasing. As the corporation strengthens its position in the market, its profit increases thanks to the markup. At the same time, the increase in assortment does not always occur, and the volume of investments decreases due to their lack of demand.
According to analysts, if the value of production had remained unchanged since 2000, the stock of capital goods would have grown by 3% and GDP by 1%. In its turn, the decrease in investment has aggravated the consequences of the 2008 financial crisis.
The influence of transnational corporations on macroeconomic processes is not significant now, but it may become more visible in the future. The possible consequences are a slowdown in the development of the industry, as companies will not be interested in developing innovations to increase competitiveness.