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

Bruno Casella, Maria Borga and Konstantin Wacker

No 2023/113, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: FDI; multinational production; multinational enterprises; foreign affiliates; FDI statistics; FDI data; conduit FDI; FDI stock; Foreign direct investment; Special purpose vehicle; Stocks; Offshore financial centers; Global (search for similar items in EconPapers)
Pages: 32
Date: 2023-06-02
New Economics Papers: this item is included in nep-fdg and nep-int
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