There’s a well-known factoid that “Of the world’s 100 biggest economies, 51 are multinational corporations”. As most economists know, this is a dodgy one, because it’s based on a comparison of total sales of corporations with GDP (a value added measure). In World Economics (not online as far as I can tell), de Grauwe and Camerman how done the more reasonable comparison of GDP and the value added by corporations. Only37 corporations make it into the top 100 and only two (Walmart at 44 and Exxon at 48) into the top 50.

This is correct in principle, but I was a bit surprised at how low the value of value added to sales came out (around 25 per cent for big companies like GM) and it struck me that there is one significant qualification to make to these results. A lot of multinational companies have large numbers of ‘tied’ subcontractors. Purchases from these tied subcontractors appear in the sales measure but not in value-added. For most of the purposes for which comparisons with GDP are appropriate, tied subcontractors should be included. If contracting out has increased substantially over the past twenty years, then the second conclusion of de Grauwe and Camerman, that the share of the biggest multinationals in world GDP hasn’t changed much in that time, might also need revision.