seem to recall that at one time it was illegal for corporations to own other corporations. I think this grew out of the abuses where A owned part of B and B owned part of A.
I think the two Phillips Electronics firms were involved in this type of trick.
If corporations were prohibited from owning other firms and if firms could not set up subsidiaries in other countries, perhaps the incentives to bad behavior would be reduced.
The most obvious present difficulty has to do with tax avoidance. Firms incorporate in tax havens and shift profits to these subsidiaries, many of which are nothing more than mailboxes.
As to the objection that firms need access to international markets to achieve efficiencies of scale and risk minimization, there is nothing in my idea that prevents them selling in other markets. If they want to invest in these regions they can do so through traditional means such as by lending money (through bonds or commercial paper) to their partner firms. They could even structure the rate of return to include a profit add on in addition to the nominal interest rate so that they could participate in the foreign firm's profitability.
It is just because big multinationals are so immune to local control that makes them so anxious to establish "independent" subsidiaries.