and accounting firms) and very common for large corporations. The
number and importance of MNEs have increased greatly over the last few
decades. A large amount of international trade represents business
transactions of MNEs—between different corporations, as well as between
different regional operations of the same corporation. MNEs play a large
role in the ongoing globalization of the world’s economy.
Finally, note that not all production in the economy takes place within
firms. Many government agencies provide goods and services, such as
defence, roads, primary and secondary education, and healthcare
services. In most of these cases, goods and services are provided to
citizens without charging directly for their use; costs are financed through
the government’s general tax revenues.