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Global Production

Global Production. Mark de Haan. Content presentation. Background Changes 2008 SNA Discussion points a. Conceptual b. Measurement related Way forward. 1. Background. Changes 2008 SNA Globalisation guide

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Global Production

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  1. Global Production Mark de Haan

  2. Content presentation • Background • Changes 2008 SNA • Discussion points a. Conceptual b. Measurement related • Way forward Global Production

  3. 1. Background • Changes 2008 SNA • Globalisation guide • Global manufacturing (or production more generally) as cross cutting issue (chapter 8) • Further investigation of unsolved issues Global Production

  4. 2. Key changes 2008 SNA and BPM6 • No exceptions to recording transactions on basis of economic ownership • Implications recording of processing, merchanting, intra-company trade • .. Global Production

  5. 2. Key changes 2008 SNA and BPM6 1993 SNA recording (‘gross’): Principal Processor (G) 50 (G) 80 2008 SNA recording (‘net’): Processor Principal (S) 30 Global Production

  6. 2. Key changes 2008 SNA and BPM6 • No exceptions to recording transactions on basis of economic ownership • Implications recording of processing, merchanting, intra-company trade • R&D capitalization→ Capital flows→ Capital services flows Global Production

  7. 3a. Conceptual discussion points • Categorisation of global production arrangements • Factory-less producers • .. Global Production

  8. 3. Conceptual issues = information Production abroad = products = money Processor (abroad) Material inputs Principal(domestic economy) Material outputs turnover productioncost Global Production

  9. 3. Conceptual issues = information Production abroad = products = money Processor (abroad) Material inputs Material outputs Principal(domestic economy) Process fee turnover productioncost Global Production

  10. 3. Conceptual issues = information Production abroad = products = money Contractproducer(abroad) Material outputs Principal(domestic economy) Material inputs Blueprints ofproduction productioncost turnover productioncost Global Production

  11. 3. Conceptual issues = information Production abroad = products = money fee or purchase of products? Contractproducer(abroad) Material outputs Principal(domestic economy) Material inputs Blueprints ofproduction productioncost turnover productioncost economic ownership of material inputs? Global Production

  12. 3. Conceptual issues = information Production abroad = products = money Trader or Manufacturer? fee or purchase of products? Contractproducer(abroad) Material outputs Principal(domestic economy) Material inputs Blueprints ofproduction productioncost turnover productioncost economic ownership of material inputs? Global Production

  13. 3a. Conceptual discussion points • Categorisation of global production arrangements • Factory-less producers • Identifying economic ownership within the multinational • Multi-territory enterprises (pro-rating)such as construction companies and project vendors • Recording intra company R&D flows Global Production

  14. 3b. Measurement issues • Merchant trade statistics based on cross border registration (processing, merchanting) • Measuring inventories abroad (idem) • Asymmetry outward processing • .. Global Production

  15. Principal-processor relationships in the Netherlands of 35 selected companies, turn over in billion € 3b. Measurement issues Remark: the -6,5 billion € production value adjustment shouldnot show up in macro totals Global Production

  16. 3b. Measurement issues • Merchant trade statistics based on cross border registration (processing, merchanting) • Measuring inventories abroad (idem) • Asymmetry outward processing • Intellectual property (legal versus economic ownership) • Big and complex cases units (…, Ireland, Netherlands, Norway, Sweden, …): determining the domestic economic activities of multinationals Global Production

  17. Current and further work in this area • Eurostat taskforce on goods for processingbuilding on the globalisation guide • CES working group global production (to be expected) • ESSnet project on measuring global value chains (a micro level research) • IARIW Conference 2012 session (8a) – ‘How to capture multinationals in national accounts?’ Global Production

  18. Thank you! Global Production

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