The Globalization of Firms

This note considers how firms have globalized by extending themselves—in multiple ways—across national borders. While only a very small fraction of firms have meaningful cross-border activities, the ones that do tend to be larger and more innovative than other firms and account for significant shares of international flows and even aggregate economic activity. Thus, in the U.S., while multinationals represented well under 0.1% of all companies, they accounted for about 24% of all private jobs, 71% of exports of goods, and 84% of nonpublic R&D in 2009.1 For the very largest multinationals, “international” activities account for more in the way of sales, assets and employment than their domestic operations.