Activities of multinationals

Firms in OECD countries increasingly adopt global strategies and establish overseas sales, marketing, production and research units to cope with new competitive pressures. Indicators on the activity of affiliates under foreign control are thus an important complement to information on FDI when analysing the weight and economic contribution of such firms in host countries.

While data on the manufacturing sector have been available since the beginning of the 1980s, the OECD did not start collecting data on the activity of affiliates under foreign control in services until the second half of the 1990s, and data are not yet available for all OECD countries.

Definition

An affiliate under foreign control is defined as one in which a single foreign investor holds more than 50% of the shares with voting rights. The notion of control allows all of a company’s activities to be attributed to the controlling investor. This means that variables such as a company’s turnover, staff or exports are all attributed to the controlling investor and the country from which he or she comes. Control may be direct or indirect.

Comparability

Fewer countries are able to supply estimates of employment in service affiliates than in manufacturing affiliates because collection of employment data on services began later. For employment in manufacturing, there are breaks in the series for the Czech Republic (1999/2000), France (2001/2002), Germany (2001/2002) and for the United States (1996/1997) because of changes to the data collection methods. For employment in services, the main problem in comparability is that financial institutions are excluded by Belgium, Germany, Ireland, Netherlands, Portugal, Spain, Sweden, the United Kingdom and the United States.