May 13, 2005

Top Countries for Big Business

by Alicia Hansen

Why does business seem to thrive more in some countries than in others?  A recent Washington Times article by Richard W. Rahn compares the business climates of 52 countries. Using the recently released Forbes magazine list of the "2000 biggest, most powerful public companies on the globe," the author ranks the countries according to the number of large public companies per million residents. He then looks for patterns among the countries where business flourishes.

Switzerland tops the list with 5 large public companies per million residents, followed by Sweden (3.1), Singapore (3.0), Finland (2.9) and Japan (2.6). The U.S. ranks sixth with 2.4. Rounding out the list are the UK (2.3), Canada (2.0), the Netherlands (2.0) and Ireland (2.0).

All or most of the top ten countries:

• have a lower-than-OECD average rate of corporate income tax
• have free markets and relatively free trade regimes
• are among the world's least corrupt countries
• have lower government spending as a percentage of GDP than the average OECD country
• score in the top 10 percent of the Heritage Foundation/Wall Street Journal Index of Economic Freedom

For more on how business climates affect where companies locate within the U.S., take a look at our State Business Tax Climate Index.