Source: Financial Times Global 500. Note: bar labels are declared employees.
There are several ways to measure the size of a corporation, including its number of employees or its revenues. Another is its market value (or market capitalization), which considers the total value of the issued shares of a company at a given time. The largest corporations can have a market value greater than the GDP of some smaller countries. For instance, Exxon Mobil, PetroChina, and Apple had a market capitalization greater than the GDP of Greece, estimated to be around $250,000 million in 2012.
Significant temporal variations in the ranking of the revenue of the world’s largest corporations are observed, which goes with the ebbs and flows of the global economy. For instance, in the early 1990s, there were a substantial number of Japanese banks and industrial conglomerates among the world’s largest corporations. Still, in the context of Japan’s economic decline, they are no longer among the world’s largest. In recent years, energy companies have improved their ranking due to increased energy prices and the ongoing growth of energy consumption in emerging economies. However, energy and resources corporations are subject to the volatility of global prices. American corporations remain among the largest, but several Chinese corporations (mostly state enterprises) are now in the top 20. Four main categories of activity dominate the largest enterprises:
- Retail. Distributing goods the a mass market of consumers has allowed since the 1960s some retailers to be among the world’s largest corporations. Through an effective control of distribution, including e-commerce, some retailers have been able to scale their size. They form large national networks of stores and distribution centers.
- Energy and resources. Oil and mining companies have remained for decades among the world’s largest corporations, underlining the importance of petroleum and resources in the global economy and its dynamics based on economies of scale. These activities are capital intensive, and the larger the corporation, the more effective its production and distribution.
- Banking and finance. Banks and financial institutions such as holding and insurance companies, consistently figure among the world’s largest corporations, particularly in terms of market value. They illustrate the importance of financial transactions (e.g. currency exchange) and capital investments in contemporary economic systems. They tend to concentrate in large global cities or at offshore locations.
- Information technologies. Corporations involved in personal computing devices (computers & smartphones) have benefited substantially from the growing prominence of information technologies in supporting economic activities and social interactions. Telecommunications firms based on subscriptions have also thrived.
- Healthcare and pharmaceuticals. The growth of the global population, rising incomes and aging have converged to create a rising demand for healtcare goods (drugs) and services.
Large multinationals emerge in sectors that are scalable, which involves two dimensions:
- Scalability of processes. Efficiency increases with the scale of production, implying that the larger the corporation, the more competitive it can become. This is particularly the case for energy, mining, technology, pharmaceutical, and financial corporations.
- Scalability of distribution. Efficiency increases by connecting markets with the providers of goods and services. This is particularly the case for retail, financial, transportation, and health corporations.
The market value of a corporation can evolve due to the changing perception of the stock market and variations in commodity prices (important for energy and mining companies). The financial crisis of 2008 has substantially impacted the market value and the rank of the largest corporations, pushing many banks out of the list as their assets were re-priced. It was estimated by the Financial Times that between 2008 and 2009, the stock market valuation of the world’s 500 largest corporations lost 42% of its value. The COVID-19 pandemic also substantially impacted the revenues and valuations of the world’s largest corporations. Due to shiting consumption behavior, the giant e-commerce distributor Amazon has experienced a surge in its sales, as well as pharmaceutical companies.