Corporate Giants and National Income: Dynamic Panel Evidence from 50 Countries, 2010-2024

National accounting frameworks formally link multinational corporate earnings to Gross National Income (GNI). However, empirical studies quantifying this relationship remain scarce and fragmented. Prior research has focused on indirect channels, such as foreign direct investment and productivity spillovers—leaving a critical gap in understanding how the direct financial performance of global firms affects macroeconomic outcomes. This study fills that gap by empirically assessing the relationship between the financial performance of Forbes Global 2000 firms—measured by revenue, profit, and assets—and GNI in their home countries. Based on a balanced panel of 50 countries from 2010 to 2024, we employ dynamic panel models with fixed effects and System GMM to address endogeneity and unobserved heterogeneity. Corporate profitability and asset size emerge as the strongest predictors of GNI, with elasticities of 0.23 and 0.22, respectively, while revenue plays a secondary role. These findings are robust to multicollinearity and alternative specifications, including Principal Component Regression and Ridge Regression. Overall, the results offer the first direct empirical evidence that the corporate sector functions as a structural component of national income dynamics, with implications for fiscal policy, corporate taxation, and macroeconomic forecasting.

multinational corporations, rentier state, gross national income, panel data, corporate finance, development economics, endogenous growth, Global 2000, GMM

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