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New Statistics at no Costs? The Case of a Joint Compilation of FDI and FATS Statistics in Austria Global Forum on Trade Statistics René Dell’mour Geneva, February 3rd 2011. F oreign D irect I nvestment Statistics FDI – Statistics part of balance of payments

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  1. New Statistics at no Costs? The Case of a Joint Compilation of FDI and FATS Statistics in AustriaGlobal Forum on Trade StatisticsRené Dell’mourGeneva, February 3rd 2011

  2. Foreign Direct Investment Statistics FDI – Statistics part of balance of payments describing financial stocks and flows related cross-border strategic shareholdings in enterprises (inward and outward) usually compiled by central banks Foreign Affiliates Statistics FATS - Statistics a recently introduced compulsory European statistics on the Activities of Multinational Enterprises (AMNE-statistics) with a focus on foreign-controlled resident enterprises (Inward-FATS) but covering also affiliates abroad controlled by domestic investors (Outward-FATS) First reporting year 2007 Background (1)

  3. FDI Financial variables Concept of Influence (10-% rule) Variables weighted by share Focus on direct affiliates FATS Non-financial variables Concept of control (>50% rule) „winner takes it all“ (100% -rule) Including affiliates under indirect control Background (2) Conceptual differences between FDI and FATS

  4. Oesterreichische Nationalbank (OeNB) Launched its first survey on FDI – stocks as early as 1968 already then included questions on economic activities thus going beyond pure bop/iip - requirements IMF- Manual (5th edition paragraph 384) There are aspects of di, other than those directly related to bop and iip data, that may be of interest from analytical and policy-making points of view. Among such aspects are those pertaining to the financial structure and operations of subsidiaries, associates, branches, and direct investors. Examples are the value of the total assets of enterprises; complete balance sheets and income statements, the composition of sales and of external financing; employment; industry activity of di-enterprises and of direct investors; gross product or value added of subsidiaries in relation to total GDP of the economies involved; and country of ultimate beneficial owner.. Prior to 2007 OeNB already provided parts of “FATS-Statistics” Background (3)

  5. Legislative body commissioned Statistics Austria with the compilation of FATS-Statistics in close co-operation with OeNB Existed on an informal basis for many years (BOP-NA) Formalized in 2002 when “Trade in Services” was handed over to NSI Quarterly Meetings at the top level Individual Contracts for specific tasks statistical law not only allows, but requires use of existing statistical or administrative data exchange of micro-data between both institutions permitted Clear focus of expertise NSI – General economic statistics NCB – Financial issues, Financial sector Co-operation NSI and NCB

  6. Matrix of co-operation Cooperation of Statistics Austria and OeNB Non financial corporations Governement corporations Households Non-profit Insitutions Financial General Current account Goods - FTS Services Income Compensation of employees Investment income Current transfers Capital account Financial account Direct Investment Portfolio Investment Financial Derivatives Other Investment Official Reserve Assets 6

  7. Balance of Payments NSI provides trade in services, current transfers, compensation of employees (Statistical) Business register Regular reconciliation, exchange of identifiers, common identifiers Identical classifications of activity and sectors of units improve quality of statistics FISIM and Income NCB provides data on financial stocks, income flows and interest rates NSI calculates FISIM and returns FISIM for BOP -> identical data for SNA Structural business statistics NCB provides non-financial data for banks (employment, investment, etc.) . . . . . and FATS (Selected) Areas of Co-operation

  8. How Inward FATS-Statistics is Compiled • NCB knows foreign control and UCI from its annual FDI Survey. • Case by case data collection allows identification of control • Finally, an automated analysis of the administrative enterprise register results in an exhaustive list of resident, foreign controlled enterprises. • NSI links SBS and NCB list using common identifiers • Identifies “inactive” units • Directly links “big” enterprises with SBS – data base. • (Employment, personnel cost, production, turnover, value added, gross investment, purchase of goods and services (for resale), R&D variables (biennial) • For SMEs outside the SBS-sample imputation mechanisms are used to arrive at totals (regression models by activity and size class – employment and turnover are used as external variables).

  9. How Outward FATS-Statistics is compiled • NCB acts on behalf of the NSI • Annual FDI-Survey addressed to all resident investors has been extended to cover all indirectly controlled affiliates abroad; (Synergy with the „Direct influence – indirect control“ concept of FDIR) • Resident Direct Investors report on ALL foreign subsidiaries above threshold(Name, address, employment, turnover) under control of the reporter. • This dataset is transferred to NSI • Subsidiaries of resident investors under foreign control (regional headquarters of foreign MNEs) are excluded in order to avoid double counting (“Nationality” of the MNE). • Subsidiaries within EU-27 are reported to EUROSTAT on a voluntary basis.

  10. A small number of Foreign Controlled enterprises (3%) which are generally bigger than average ( 19 % of employment) tend to pay better ( 26 % of personnel costs) are more productive than the average (32 % of turnover) and very innovative (53% of business R&D expenditure) Foreign control varies between activities E.g. 5% of employment in construction, but 28% in manufacturing) Foreign control is highly concentrated German MNEs (49 % of employment) Swiss MNEs ( 10 % of employment) US MNEs ( 10 % of employment) Dutch MNEs (5% of employment Selected Results (Inward)

  11. Affiliates abroad controlled by resident investors employ 760.000 people, which is more than inward FATS (500.000) but their sales (turnover) amount to 178 bn EUR only, which is less than the comparable figure for inward FATS (197 bn EUR) One third of affiliates abroad are part of foreign Multinationals Therefore only 480.000 employees abroad are “Austrian” according to FATS This fact underlines the role of regional headquarters in Austria Affiliates abroad are much more dispersed The biggest host country (Romania) accounts for slightly more than 10% with Hungary, the Czech republic and Germany being only slightly less important Followed by almost 80 countries more Source: FATS 2007 Selected Results (Outward)

  12. Conclusion • The new FATS-Statistics could be compiled • without setting up a new survey • without increasing the respondents’ burden • at reasonable cost for the statistical agencies • Thanks to • Compatible definitions • Overcoming the confidentiality barrier • Increased use of existing data • Harmonization of registers • Granular data-collection • Close co-operation of institutions involved

  13. Thank you! René Dell'mourSenior ExpertExternal Statistics and Financial Accounts Oesterreichische NationalbankOtto Wagner-Platz 31090 Vienna/AustriaTel: +431 40420/5415rene.dellmour@oenb.atwww.oenb.at

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