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

Download or read book Measuring Multinational Production with Foreign Direct Investment Statistics: Recent Trends, Challenges, and Developments written by Bruno Casella and published by International Monetary Fund. This book was released on 2023-06-02 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.