Measuring Multinational Production with Foreign Direct Investment Statistics: Recent Trends, Challenges, and Developments

By Bruno Casella, Maria Borga, Konstantin Wacker

June 2, 2023

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Bruno Casella, Maria Borga, and Konstantin Wacker. Measuring Multinational Production with Foreign Direct Investment Statistics: Recent Trends, Challenges, and Developments, (USA: International Monetary Fund, 2023) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

In a complex global production landscape, the quest for measures of economic activity by multinational enterprises (MNEs) has become more pressing. Foreign Direct Investment (FDI) statistics, which capture financing aspects of MNEs, have often been used as a proxy for multinational production given their wide availability and cross-country comparability, but concerns that multinational production occurs in different countries than where financial positions are recorded call this practice into question. This paper revisits the main objections to the use of FDI as a proxy for multinational production, explores counterarguments, and provides guidance on the use of FDI statistics to measure multinational production.

Subject: Asset and liability management, Balance of payments, Financial institutions, Financial services, Foreign direct investment, Offshore financial centers, Special purpose vehicle, Stocks

Keywords: Conduit FDI, FDI, FDI data, FDI statistics, FDI stock, Foreign affiliates, Foreign direct investment, Global, Multinational enterprises, Multinational production, Offshore financial centers, Special purpose vehicle, Stocks

Publication Details

Pages:

32
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2023/113
Stock No:

WPIEA2023113
ISBN:

9798400243530
ISSN:

1018-5941

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