1. Euroframe 3 June 2005 1 FATS Frédéric Boccara Insee, IDHE-CNRS A statistical set about MNEs to analyse relations between BoP & Growth

2. Euroframe 3 June 2005 2 I. Method issues II. The size of the delocation phenomenon III. A new phases : Informational Revolution IV. Costs and Factors V. Economic Theory VI. Economic Policy

3. Euroframe 3 June 2005 3 Method Delocation: suppression of an activity in one place & displacement in another place Relative delocation (e.g. IBM-Infineon) Less and more than FDI FATS ==> a focalisation on MNEs

4. Euroframe 3 June 2005 4 Size of the phenomenon: Output (sales)

5. Euroframe 3 June 2005 5 Size of the phenomenon: Countries Outward Sales 1995-2002: Contribution to the total change

6. Euroframe 3 June 2005 6 Comparison Sales/Jobs/FDI/Trade

7. Euroframe 3 June 2005 7 Employment (1)

8. Euroframe 3 June 2005 8 Employment (2) Descriptive « rough » estimation

9. Euroframe 3 June 2005 9 Causes and Factors New phases ? -> services Importance of North / North ==> not only factor proportions Look to MNEs theories Empirical look to costs

10. Euroframe 3 June 2005 10 New phases and services: informational revolution (IR) Hand/MachineTool -> Brain/Information Machines Transversal to industries Sharing potential Distance control possibilities Key role of human capabilities, and expanses -> Taken by a reinforced role of financial assets

11. Euroframe 3 June 2005 11 Some recent theories of MNEs (antecedents: Leontief paradox, Vernon, IDPP) Dunning: eclectic paradigm (OLI, specific K) Brainard: complementarity N/S, substit S/S -> fixed cost at MNE level Krugman: agglomeration effects Markusen: specific K --> knowledge based, R&D

12. Euroframe 3 June 2005 12 Interpretation Central role of IR sharing of informational results access to informational resources R&D and Human resources expanses ==> quid other costs than wages ? Key role of MNEs as a sharing private perimeter (contradictory) take the enterprise group level (financial links) ==> affiliates and parent companies as a financial network global financing capacity & « domestic » (parent) cost

13. Euroframe 3 June 2005 13 Costs : three hypothesis To relativise wage costs Fixed global cost Global finance mobilising/parent cost ==> –see also « capital costs » –take costs at the MNE level

14. Euroframe 3 June 2005 14 Costs: definitions and notions Capital costs: aK labour costs: bL Intermediate input costs: cCI labour cost of affiliate (bL O ) ==>  (cCI) D for parent aK  Domestic: (aK) D ; Outward: (aK) O etc. ==> (aK) D >> (aK) O & cCI MNEs < others

15. Euroframe 3 June 2005 15 Costs: method Compare Parent Company costs/Sales to Other resident Company costs/Sales (companies without Affiliates abroad) ==>  Parent Cost to Total Cost Mean of Z ratio, by type j, given the size k, the industry l

16. Euroframe 3 June 2005 16 Costs: Average Costs of firms (2001)

17. Euroframe 3 June 2005 17 Internal Resources of national economies Interpretative Scheme  Process of located Activities Located Results  Globalisation of Results and Resources New Globalisable Resources  (re/de)Location of Activities Localised Activities Feedback leverage

18. Euroframe 3 June 2005 18 Economic Theory MNEs as institutions associating Transfers and Trade of international co-operative production association Transfers, Trade and Production  need to be treated not apart of « Trade Theory »

19. Euroframe 3 June 2005 19 Economic theory (2) HOS results (gain,..) to be revisited with possibility of transfers by productive and trading agents FDI  Trade ==> not WTO, but Central Banks fundamentally concerned by MNEs (transfers, financial activity supervision) RI & Employment role : (i) New bias (ii) Advances

20. Euroframe 3 June 2005 20 Economic Policy Employment policy goal to be revisited  New biases are necessary  Security of Employment or Training-Education Goals and instrument of monetary Policy  European Central Bank (ECB)  Towards a New kind of Selectivity

21. Euroframe 3 June 2005 21 Economic policy (2): ECB Policy and institutional Reform for New selective Refinancing of Firms Role of States (+Local..) in subsidised loans Role of ECB in financing of public deficits (selectivity) Mutual Funds: (i) for securing loans (ii) for reconverting Enterprise government