The specific ownership and the details are irrelevant, what matters is that a large chunk of their profits is extracted out of the country and doesn't get reinvested.
Thats not how the economy works. Walmart profits don't get "invested" in the States. They get invested into Walmart. The wages and taxes those wages fuel always gets applied locally. Nothing is being "extracted". Thats just nationalist bullshit used to fuel protectionism.
If the very well paid jobs stay in the home country, how do you call that?
If the interesting work all stays in the home country, how do you call that?
We like to kid ourselves that multinational companies are truly multinational, companies of the world. What's the percentage of non-American top managers, for example, working for American based multinationals? It's probably in the low 1-digit percentages.
There is a definite advantage to bejng an early investor. For these companies the risk is comparatively small and the rewards they reap are huge and on very long time horizons.
It's not super clear cut that it's all nationalist BS.
AFAIU, neither wages nor investments count as profits - those are paid to owners / shareholders.
As far as returning the earnings to workers and local economy via taxes - yes there are expenses, you can't take 100% of income as profits, but there is a lot of leeway to direct the funds pretty much wherever the company chooses. Corporate headquarters in tax friendly countries are popular for a reason.
So if wallmart buys a chain that wasn't competitive because they didn't decided to have wages so low their employees require foodstamps do you think that helps the local economy?
When the company buys in Romania and lays of the local marketing, sales departments, etc to make things more efficient, uniform and streamlined that doesn't help the local economy. That makes things more efficient tho but as a Romanian you're left holding the bag.
Now everything is foreign owned and the streamlining and competition has played out in such a fashion that there's potentially less competition and consequently less benefits off competition. (see all the modern industries that have turned into duopolies, monopsonies or the like that can easily keep new competition from coming in but also don't compete enough to drive consumer prices down.
Is that really true? The international supermarkets may chose to invest by open new stores....secondly, they had to buy the local supermarkets in the first place...that went somewhere...maybe that was reinvested locally. It is not clear cut.
> they had to buy the local supermarkets in the first place
When foreign owners extract profits to recover their investment or pay whomever, wealth is in fact leaving the country - because they still own the capital (stores) yet get money back.
It's not clear cut based on this. They could have invested beyond price, brought knowledge, improved efficiency ...
It's also possible they are in effect extracting wealth colonialist style, which is something to beware of - at scale it can have severe consequences for local economies.
Yep. The story about large corporations being totally nationeless is a pure fantasy. For example, just a couple years ago Fiat-Chrystler decided to move production from one of its best factories in Poland to one of its worst (in terms of quality and costs per unit), located in Italy. It made zero sense for the business and was only made as a favor to Italian politicians.
In more general sense, all global companies have some originating country and most of them keep the HQ and most of the high-paying jobs there. They expand to other countries mostly as a cost-saving measure and they have zero loyalty to them, while they have a lot of loyalty to the mothership.
No, it makes perfect sense when you factor in that FIAT/FCA/Stellantis was and is the receiver of massive subsidies, in various guises, from the Italian state. Losing those would be more harmful to the business than losing any foreign factory (with the exception of US ones, which were also beneficiaries of massive state support). FCA stopped being a "national champion" ages ago, they are just a hardened global business now; they just know which side their bread is buttered.
> They expand to other countries mostly as a cost-saving measure and they have zero loyalty to them
Believe me, they have zero loyalty to "the motherland" too. Many of them have long relocated their HQ too, for fiscal reasons. FCA/Stellantis, for example, is now based in Amsterdam. The chance that they'll ever expand again their manufacturing bases in Italy or France is minimal.
Honestly, the issue is that national champions don't exist anymore. Greed-is-good is all that matters.
Aldi the 3rd (or 4th) biggest supermarket chain is still owned essentially by the Aldi families (there are in fact 2 Aldi chains, because the brothers could stand each other.
In practice, many large companies are owned by investors from all over the world looking for diversification.