Financial operations of US transnational corporations: development after the Second World War and recent tendencies

Abstract

The basis of contemporary transnational corporations (TNC) presents capital export in the form of foreign direct investment (FDI). Capital export from the USA began at the end of the nineteenth century and in 1897 had reached $600m. Until the First World War it was growing at about 9% a year. In the period between the two world wars the capital export growth rate slowed down. Nevertheless after the Second World War it accelerated again (in the 1950s and 1960s to about 10%, in the 1970s to 11% a year), the main form of private foreign investment becoming direct investment. In this period capital export was already closely connected with TNCs' global strategy. TNCs became typical international monopolies of the day, integrating and controlling within the framework of one complex all phases of the reproduction process. Between 1946 and 1964, 187 US industrial corporations (belonging to the 500 largest corporations of the USA) have founded or acquired about 60% of existing affiliates abroad. These constitute the basis of contemporary international monopoly complexes, taking advantage of international specialisation and co-operation of production. At the same time US foreign investment began to be directed to industrially developed countries, and this trend intensified in the following period. While in 1950 48.6% of US FDI was directed to industrially developed capitalist countries, in 1960 the figure had increased to 59.2%, in 1970 68%, in 1975 73.2% and in 1983 75%.