A Global Database of Foreign Affiliate Sales

Tani Fukui and Csilla Lakatos

No 332203, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: There is a severe lack of data describing foreign affiliate activity. To fill this gap, we produce a new dataset to further the literature on the behavior of multinational firms. Eurostat’s Foreign Affiliate Statistics database, with a large number of sectorlevel, bilateral observations on foreign affiliate sales, provides a basis from which to extrapolate the relationship between various host and source country factors and the foreign affiliate activity produced by them. This paper exploits the detailed level of the data by introducing sector-specific variables that in turn permit out of sample predictions. Further, the large number of excess zeros in the Eurostat dataset presents added complexity and is addressed using techniques borrowed from the trade literature, which also experiences a “zeros” problem. The dataset produced in this paper also serves as an input into the GTAP-based FDI model of Lakatos and Fukui (2012). This model integrates the foreign affiliate sales dataset produced in this paper into a framework that permits the analysis of the behavior of foreign affiliates within the context of a general equilibrium model.

Keywords: International Relations/Trade; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 45
Date: 2012
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:332203

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