The leading international companies have created more than 370,000 subsidiaries globally. The US is the top market for both domestic and foreign subsidiary creation followed by Asia, By Investment Monitor
The establishment of subsidiaries is an important vehicle for corporate expansion activity and therefore a crucial component of cross-border as well as domestic investment. While there is much variance in how much value a subsidiary creates for its host country and how many jobs, if any, it might create, the choice of location for legal subsidiaries still tells us much about global business patterns and preferences.
The US market is the dominant force. It has the highest number of international companies included in the analysis as well as the most domestic and foreign subsidiaries.
This year we have extended our multinational companies database to analyse the subsidiaries of more than 6,000 international companies. Our previous analysis covered the top 2,000. In total, 370,320 subsidiaries were found for 6,186 leading companies. These companies were headquartered across 77 different countries. More than one-quarter (27.5%) were based in the US, while one-fifth called China home.
Where are top international companies headquartered?
A subsidiary is a company that is either owned or controlled by another company (its parent company). According to Chron.com, companies may create a subsidiary for various reasons including brand recognition, financial considerations, the ability to raise capital, and the capacity to deal with reporting and disclosure issues. The US and China are the largest sources of global companies. Of the 6,186 companies analysed, 1,700 were from the US and 1,272 from China.
Asia-Pacific and North America are the key destination regions for subsidiary establishment. There were 110,550 subsidiaries established in Asia and 107,764 created in North America. Western Europe was the next most popular destination, with 101,422 subsidiaries.