Uses of FDI statistics Ayse Bertrand Investment Division

Uses of FDI statistics Ayse Bertrand Investment Division, OECD ayse. bertrand@oecd. org 1

Uses of FDI statistics n An overview n Users’ expectation n Do we meet user needs? 2

Uses of FDI statistics Overview n Why measure FDI? n Understanding main features n Interpreting FDI statistics n Most frequently asked question 3

Why measure FDI n n Liberalisation of capital movements Motivation of FDI – Lasting relationship – Influence/control the management/decision making n n FDI is a part of macro-economic statistics Key element for globalisation 4

Main Features n n n n Links with other macro-economic analysis 10 per cent ownership of voting power More & more complex investment patterns of MNEs More & more complex group structures Types of data: financial flows and stocks, income Structure: equity, reinvested earnings, intercompany debt Market value 5

Interpreting FDI statistics n n Aggregate BOP data Detailed data for FDI statistics – By partner country – By industry classification n Importance of ultimate destination – By partner country – By industry classification n Pass-through funds and capital in transit 6

Most frequently asked questions 1) What are the relations between FDI transactions, positions (stocks) and income? 2) How to Interpret negative values? 3) What explain large data revisions? 4) Which criteria for classifying FDI by economic activity? 5) What is the role of capital in transit and/or passing through SPEs? 6) What degree of complementarity of FDI & AMNE statistics? 7) What explains discrepancies in the FDI data provided by international organisations 7

User Expectations To analyse: 1) FDI trends and developments 2) Attractiveness of the domestic economy as an investment location 3) Opportunities and challenges when domestic enterprises move offshore 4) “Unwelcome” mergers and acquisitions, strategic sectors and national champions 5) Investment for development: FDI from the OECD area to poorer countries 8

Do we meet user needs? FDI statistics are expected to provide within the revised framework : 1) In-depth information about partner countries 2) Detailed equity investment data 3) “Real” investment as opposed to “paper transactions” 4) Special purpose entities. 9

Do we meet user needs? Data needs which require future work: 1. New forms of corporate linkups, eg 1. 2. 3. 4. 5. Strategic alliances Joint ventures Transfer of know-how Activities of MNEs Etc 2. How to ensure consistency with FDI statistics? 10

Thank you. Ayse Bertrand Manager, International Investment Statistics Investment Division Directorate for Financial and Enterprise Affairs Tel: 33 1 45 24 91 24 Fax: 33 1 45 24 13 34 E-mail: ayse. bertrand@oecd. org 11