Foreign AffiliaTes Statistics (FATS): Inward and Outward Michael E. Nielsen & Jon Mortensen EU Twinning Project: Globalisation Statistics State Statistics Service of Ukraine, 28 April 2015

 Why FATS  Inward FATS  Outward FATS  Future/FRIBS… Outline 2

 Multinational enterprises (MNEs) play a key role in the global economy and foreign affiliates (of MNEs) contribute to a host country’s international competitiveness and welfare  And provides access to new markets and new technologies/knowledge  FATS are mandatory for EU-countries (since 2007)  Adds value to FDI statistics with more detailed information on the economic impact of investments in terms of job creation, etc Why FATS Statistics? 3

 Foreign controlled enterprises resident in the country that compiles the statistics  Residency of the ultimate controlling institutional unit (UCI) defines the nationality of an enterprise  Control is generally defined as >50 per cent direct or indirect ownership  Disseminated annually (t+20 months) Inward FATS (IFATS) 4

 Country of UCI  Turn-over (of affiliate)  Number of employees  Number of affiliates  Activity (NACE)  Thus, inward FATS describe how many jobs, how much turnover, etc. are generated by foreign investors in the host economy IFATS: Variables 5

 Central Bank (FDI statistics)  The statistical business register  Annual reports, offical accounts of enterprises  General enterprise statistics  Thus based on existing data with no additional response burden on enterprises IFATS: Sources 6

IFATS: Results 7 Enterprises by ownership in EU-28, 2011

Enterprises by ownership in Denmark, 2012 IFATS: Results 8

 Enterprises controlled from the compiling country, but resident abroad  EU-regulation: Residency of the ultimate controlling institutional unit (UCI) defines the nationality of an enterprise  …But the Danish survey covers all affiliates owned by Denmark-based enterprises regardless of UCI  Control is generally defined as >50 per cent direct or indirect ownership  Disseminated annually (t+14 months) OFATS 9

 Dissiminated:  Number of affiliates  Country of affiliates  Number of employees (of affiliates)  Activity (NACE)  Not dissiminated  Country of UCI  Turn-over (of affiliates)  Thus, OFATS describe the number of employees, the activity and geography of foreign affiliates OFATS: Variables 10

 Annual census compulsary survey  Almost 5000 enterprises in Denmark -Reporting units  Approx foreign affiliates -Statistical units  Dissimination  Approx Danish companies  Approx foreign affiliates  Supporting sources  OFATS: Sources 11

 ODIN (a commercial database)  FDI-statistics compiled by the Central Bank  Includes information on financial sector  Annual reports from enterprises These sources are primarily used to create new survey population  Country of UCI from IFAT OFATS: Sources 12

Number of foreign affiliates, 2012 OFATS: Results 13

Number of Danish Affiliates, top 25 (total=11 964) OFATS: Results 14

Number of employees, top 25 (total=1,3 mill.). Ukraine #36 with 8015 emp. OFATS: Results 15

 Framework regulation integrating business statistics (FRIBS)  IFATS  Covering more activities (NACE Rev.2 sections O-S)  A*38 alignment: we expect more detail in IFATS data, confidentiality spill-over to SBS, spill-back to IFATS confidentiality  OFATS  New variables: Personnel costs, investments  Intra-EU affiliates included Future/FRIBS 16

Thank you for your attention! Michael E. Nielsen Jon Mortensen