CHAPTER I Global Investment Trends

28
World Investment Report 2011: Non-Equity Modes of International Production and Development
closing stores in developed markets in Europe. 23
General Electric (United States), the world’s largest
TNC in terms of foreign assets, is also emblematic
of this shift, having announced recently that it intends
to intensify its focus on emerging markets –
which account for 40 per cent of the firm’s industrial
revenues – in order to reduce costs and increase
revenue growth. 24
Figure I.24. Greenfield investments by the largest
100 TNCs in the world, by host region,
2007–2008 and 2009–2010
(Number of projects and percent change between periods)
Developed economies
Developing economies
Latin America and
the Caribbean
South, East and South-
East Asia and Oceania
Transition economies
Source: UNCTAD.
Africa
West Asia
2. State-owned TNCs
The emergence of State-owned
TNCs, especially those from
developing economies,
as important outward investors,
has implications for both home
and host economies.
0 500 1 000 1 500
2009–2010 2007–2008
4
23
23
61
9
41
The internationalization
of large State-owned
enterprises (SOEs)
from developing and
transition economies
constitutes an important
component of FDI.
State-owned TNCs from developed countries are
also extant internationally, albeit not widely recognized.
The ownership difference from traditionally
private or shareholder-owned TNCs – putatively
impacting on their objectives, motives and strategies
– has become an issue of intense interest and
debate, if not yet of extensive research.
State-owned TNCs are defined as enterprises
comprising parent enterprises and their foreign
affiliates in which the government has a controlling
interest (full, majority, or significant minority), whether
5
or not listed on a stock exchange. Definitions of
what constitutes a controlling stake differ, but in
this Report, control is defined as a stake of 10 per
cent or more of the voting power, or where the
government is the largest single shareholder. Stateowned
refers to both national and sub-national
governments, such as regions, provinces and cities.
Importantly, this definition excludes international
investments by SWFs, which have become more
visible investors in recent years 25 (see section A.1.e
for a review of recent trends in SWF-sponsored
FDI), because they are not enterprises and are
not necessarily governed by the usual corporate
mechanisms. Some illustrative examples of factors
determining what constitutes a State-owned TNC
– for example, France Telecom, in which the State
has a roughly 26 per cent-stake – are included in
box I.7.
a. The universe of State-owned
TNCs
In 2010 there were at least
650 State-owned TNCs,
with more than 8,500
foreign affiliates, operating
around the globe. 26 Relatively small as a group,
State-owned TNCs nevertheless
rank among the
largest TNCs in the world.
While
this makes them a minority in the universe of all TNCs
(see section C.1 for more details), they nevertheless
constituted a significant number (19 companies)
of the world’s 100 largest TNCs of 2010 (also in
2009), and, more especially, of the top 100 TNCs
from developing and transition economies of 2009
(28 companies). The largest 15 of these Stateowned
TNCs, from both developed and developing
economies, are a relatively well-known group with
recognizable names (table I.7). It is important to note
that this enumeration of State-owned TNCs refers
only to parent firms, which has the effect of reducing
some widespread conglomerates to a single entry.
Additionally, a number of the State-owned TNCs
are identified such only due to a recent crisisinduced
intervention, thus their membership on
this list should be considered temporary (General
Motors, for example).
Government control of State-owned TNCs spans a
spectrum from full control to substantive influence.
Roughly 44 per cent of State-owned TNCs are
majority-owned by their respective governments
(figure I.25). These include companies that are fully