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European Multinationals: An International Comparison of Size and Performance

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European Approaches to International Management
This chapter is in the book European Approaches to International Management
European Multinationals: An International Comparison of Size and Performance Alan M. Rugman Summary The 50 largest European multinational enterprises are identified and their financial performance over the last ten years is contrasted to that of a group of North American multinationals. It is found that the European multinationals are less profitable due to the extent of state ownership or participation in a large number of these firms. 1. Introduction In this paper the largest European multinational enterprises (MNEs) are identified and their financial performance is contrasted with that of the largest North American MNEs. Data on the size and degree of multinationality of these firms are also reported. As an indication of financial performance the mean return on equity over 10 years (1973-1982) is calculated and as a proxy for risk the standard deviation of this rate of return is used. The difference in financial performance of the European MNEs relative to the U.S. MNEs (and also a group of Canadian MNEs) is analyzed in terms of the size and degree of multinationality between the two groups. The presence of state-owned enterprises (SOEs) in Europe is also examined as a possible factor to explain the difference in the financial performance between the European and North American MNEs. 2. Size and Performance of European Multinationals The 50 largest European and U.S. MNEs were selected from the Fortune International 500 and the Fortune 500 Industrials respectively (Fortune 1974a-1983a and 1974b-1983b). MNEs with less than 20 percent foreign sales to total sales (F/T), as reported in Stopford (1983), were deleted from the lists. Sales by foreign affiliates to total sales would have been a preferable criteria as (F/T) includes export sales. However, this information is not segregated for a sufficient number of MNEs to enable its use as a measure of multinationality.
© 2019 Walter de Gruyter GmbH, Berlin/Munich/Boston

European Multinationals: An International Comparison of Size and Performance Alan M. Rugman Summary The 50 largest European multinational enterprises are identified and their financial performance over the last ten years is contrasted to that of a group of North American multinationals. It is found that the European multinationals are less profitable due to the extent of state ownership or participation in a large number of these firms. 1. Introduction In this paper the largest European multinational enterprises (MNEs) are identified and their financial performance is contrasted with that of the largest North American MNEs. Data on the size and degree of multinationality of these firms are also reported. As an indication of financial performance the mean return on equity over 10 years (1973-1982) is calculated and as a proxy for risk the standard deviation of this rate of return is used. The difference in financial performance of the European MNEs relative to the U.S. MNEs (and also a group of Canadian MNEs) is analyzed in terms of the size and degree of multinationality between the two groups. The presence of state-owned enterprises (SOEs) in Europe is also examined as a possible factor to explain the difference in the financial performance between the European and North American MNEs. 2. Size and Performance of European Multinationals The 50 largest European and U.S. MNEs were selected from the Fortune International 500 and the Fortune 500 Industrials respectively (Fortune 1974a-1983a and 1974b-1983b). MNEs with less than 20 percent foreign sales to total sales (F/T), as reported in Stopford (1983), were deleted from the lists. Sales by foreign affiliates to total sales would have been a preferable criteria as (F/T) includes export sales. However, this information is not segregated for a sufficient number of MNEs to enable its use as a measure of multinationality.
© 2019 Walter de Gruyter GmbH, Berlin/Munich/Boston

Chapters in this book

  1. Frontmatter I
  2. Preface V
  3. Contents VII
  4. Part 1. Features of European Multinationals
  5. Introduced 1
  6. International Competitiveness of European Industry 5
  7. European Multinationals: An International Comparison of Size and Performance 15
  8. Japanese and European Multinationals in America: A Case of Flexible Corporate Systems 23
  9. New Multinationals in Europe 39
  10. Role and Structure of German Multinationals: A Comparative Profile 51
  11. Role and Structure of Swiss Multinationals 67
  12. Role and Structure of British Multinationals 79
  13. Role and Structure of Swedish Multinationals 93
  14. Role and Structure of Belgian Multinationals 105
  15. Industrial Relations and Europe's Multinationals 129
  16. Part 2. State and Future of Europe's Important Industries
  17. Introduced 143
  18. Industrial Policy and Industrial Culture: The Case of European Petrochemical 163
  19. Steel and the European Communities 185
  20. The European Aerospace Industry 205
  21. Corporate Adjustment Strategies in the European Clothing Industry 227
  22. The European Microelectronics Industry and New Technologies 241
  23. Part 3. European Concepts of the Managerial, Financial, and Personnel Function
  24. Introduced 257
  25. Strategic Planning and Structuring of Organization 261
  26. Strategie Resource Management: Securing International Competitiveness through Competitive Resources 275
  27. Success Factors in International Management: The "Turnaround" Case of a Multinational's European Subsidiary 285
  28. Financing Corporations in Major European Capital Markets 295
  29. Margin and Risk Management in International Credit Transactions Undertaken by Banks 317
  30. European Financial Reporting: Standards and Efficiency Problems 335
  31. Personnel Management in Western Europe - Development, Situation and Concepts - 351
  32. Public Administration and Civil Service in Europe - Approaches to Reform - 369
  33. The Authors 381
  34. Backmatter 387
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https://doi.org/10.1515/9783110849844-004

Chapters in this book

  1. Frontmatter I
  2. Preface V
  3. Contents VII
  4. Part 1. Features of European Multinationals
  5. Introduced 1
  6. International Competitiveness of European Industry 5
  7. European Multinationals: An International Comparison of Size and Performance 15
  8. Japanese and European Multinationals in America: A Case of Flexible Corporate Systems 23
  9. New Multinationals in Europe 39
  10. Role and Structure of German Multinationals: A Comparative Profile 51
  11. Role and Structure of Swiss Multinationals 67
  12. Role and Structure of British Multinationals 79
  13. Role and Structure of Swedish Multinationals 93
  14. Role and Structure of Belgian Multinationals 105
  15. Industrial Relations and Europe's Multinationals 129
  16. Part 2. State and Future of Europe's Important Industries
  17. Introduced 143
  18. Industrial Policy and Industrial Culture: The Case of European Petrochemical 163
  19. Steel and the European Communities 185
  20. The European Aerospace Industry 205
  21. Corporate Adjustment Strategies in the European Clothing Industry 227
  22. The European Microelectronics Industry and New Technologies 241
  23. Part 3. European Concepts of the Managerial, Financial, and Personnel Function
  24. Introduced 257
  25. Strategic Planning and Structuring of Organization 261
  26. Strategie Resource Management: Securing International Competitiveness through Competitive Resources 275
  27. Success Factors in International Management: The "Turnaround" Case of a Multinational's European Subsidiary 285
  28. Financing Corporations in Major European Capital Markets 295
  29. Margin and Risk Management in International Credit Transactions Undertaken by Banks 317
  30. European Financial Reporting: Standards and Efficiency Problems 335
  31. Personnel Management in Western Europe - Development, Situation and Concepts - 351
  32. Public Administration and Civil Service in Europe - Approaches to Reform - 369
  33. The Authors 381
  34. Backmatter 387
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