Measuring globalization: Better data for better policy - Ayse Bertrand - 2014 FDI Statistics Workshop
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Ayse Bertrand's presentation at the FDI Statistics Workshop (20 March 2014) during the session on whether or not FDI statisics are still a useful metric when measuring investment globalisation. Find out more at http://www.oecd.org/daf/inv/measuring-globalisation-fdi-statistics-workshop-2014.htm
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Measuring globalization: Better data for better policy - Ayse Bertrand - 2014 FDI Statistics Workshop
- 1. OECD FDI STATISTICS WORKSHOP Measuring globalization: Better data for better policy 20 March 2014, Paris By Ayse Bertrand OECD WGIIS Co-ordinator for Russia
- 2. Some Facts WHY MEASURE FDI ? WHAT TO MEASURE HOW TO MEASURE FDI part of macroeconomic Stats. BOP/IIP/NA(ROW) FDI part of globalization /investment/enterprise analysis INWARD AND OUTWARD FDI as factor of globalization ALL CROSS BORDER transactions/ positions ASSET/LIABILITY PRINCIPLE Accumulate all transactions /positions DIRECTIONAL PRINCIPLE Record according to the direction of influence or control IMF BPM6 /OECD BMD4 • SAME DATA ORGANISED DIFFERENTLY • LESS REPORTING BURDEN • MORE CONSISTENCY
- 3. FDI STATISTICS HOW TO ANALYSE GENUINE FDI ELIMINATE DOUBLE COUNTING Segregate capital in transit Via SPEs = BMD4 Via operating units (not possible) Reclassify capital in transit in the form of loans between entities not directly linked by FDI (BMD4 – XDP) Reclassify round-tripping of domestic funds (BMD4 - XDP) Other refinements Identify FDI EQUITY flows in the form of mergers & acquisitions (BMD4 - XDP) Identify ultimate investor (ultimate beneficiary) (BMD4 - XDP)
- 4. IMPACT OF SPEs TOTAL FDI FLOWS AND FDI EXCLUDING FDI: Austria, Hungary, Luxembourg, Netherlands Source: OECD 0 100 200 300 400 500 600 700 800 2006 2007 2008 2009 2010 2011 USDbillion Genuine FDI Total FDI inflows 0 100 200 300 400 500 600 700 800 2006 2007 2008 2009 2010 2011 USDbillion Genuine FDI Total FDI outflows
- 5. IMPACT OF XDP: Example FRANCE EQUITY INVESTMENTS INTERCOMPANY DEBT A/L A/L A/L A/L A/L A/L A/L XDP XDP XDP XDP XDP XDP XDP 0 200 400 600 800 1000 1200 2005 2006 2007 2008 2009 2010 2011 Eurobillion FDI Assets/FDI outward positions A/L A/L A/L A/L A/L A/L A/L XDP XDP XDP XDP XDP XDP XDP 0 50 100 150 200 250 300 350 2005 2006 2007 2008 2009 2010 2011 Eurobillion FDI Liabilities/FDI inward positions A/L A/L A/L A/L A/L A/L A/L XDP XDP XDP XDP XDP XDP XDP 0 50 100 150 200 250 300 350 400 2005 2006 2007 2008 2009 2010 2011 Eurobillion FDI Assets/FDI outward positions
- 6. FDI as globalization indicator LIMITS OF FDI AS GLOBALIZATION INDICATOR ARE CONCEPTUAL FDI represents only the share of foreign investment but not total capital of MNEs BMD4 resolves most analytical/methodological problems Timeliness of estimates should be improved FDI IS THE STARTING POINT FOR LONG-TERM RELATIONSHIP Between MNEs (of all sizes) and their non-resident affiliates FDI allows complementary cross-border (or domestic) financing controlled by the MNE all of which contribute to globalisation It is necessary to identify total financing capacity of MNEs and the share of FDI OECD-WGIIS work on financing of MNEs is the linkage between FDI and economic globalization [DAF/INV/STAT(2011)10/FINAL]