Global ownership patterns

This thesis has three main parts. In the empirical part, I assemble a new dataset of global corporate acquisitions and sales at the firm level to analyze multinational expansion patterns. Four facts emerge: (1) the number of acquisitions per firm has a Pareto distribution; (2) firms expand into industries and countries with a similar Pareto pattern; (3) entrants into unpopular industries or countries are larger, as measured by global sales; and (4) at the firm level, industrial diversification and internationalization are simultaneous. In the second part, I present a model of balls falling into bins to understand the probability mechanics of multinational firms. The model takes as given the size distribution of firms and makes predictions about the probabilities of particular allocations of goods in the country and industry dimensions. Surprisingly, I find the model quantitatively reproduces the observed entry regularities, including those that relate to sales. The conclusion is that multinationals behave as if they were a random collection of identical size goods. In the third part, I propose a multi-industry-country model in which firms produce in their core competence activities.