Page 412 - Invited Paper Session (IPS) - Volume 1

IPS173 Tatiana Mosquera Yon et al.
sinking transport costs and the improvement of information technologies
have allowed companies to relocate their production activities to even more
remote places around the globe. This all has led to a steady growth in the
number of MNEs which in turn intensify the globalisation process. New
markets are created, new production chains being established leading to the
birth of new leaders. A well-known example is the global production of the I-
phone or the development of the digital market which led to the emergence
of new actors such as Apple, Amazon, or Google. Their economic development
relies on the possibilities offered by globalisation allowing them to grow faster
by reaching more customers and to offer more products.
The understanding of the global thinking of MNEs - which are mainly
driven by tax minimisation and profit maximisation at a global level - is of
utmost importance for politicians today. An adequate statistical measurement
of MNEs induced international flows of capital, goods, services and intellectual
property is a prerequisite to assess the consequences of national economic
and financial policies for employment, income and wealth. Thus, the
comprehensiveness of all statistics affected by MNE decisions like the Balance
of Payments (BoP), National Accounts (NA) and Business Statistics (BS) are
necessary to establish efficient economic, trade or fiscal policies.
Relevant statistics are also important to produce more sophisticated
indicators on globalisation, global value chain and international fragmentation
of the production process. To give the best information, these indicators need
to be produced with high quality data that can only be compiled if the
contribution of MNEs is clearly identified.

Location of economic ownership in MNE-Groups
In the International Monetary Fund (IMF)’s sixth edition of balance of
payment manual (BPM6), the time of recording of transactions is based on the
change of ownership. “The change of economic ownership is central in
determining the time of recording on an accrual basis for transactions in
2
goods, non-produced non-financial assets, and financial assets” .
In the case of MNEs, the BPM6 specifies that “goods may move between
a parent and its branch abroad. In that case, possibilities exist that either the
goods have changed economic ownership or they may have been sent for
processing. The correct statistical treatment is to identify which location
assumes the risks and rewards of ownership most strongly (e.g., from factors
such as whether the goods are included in the accounts, and which location is
responsible for subsequent sale of the goods)” .
3

2 Paragraph 3.41 of BPM6, p.55.
3 Paragraph 3.46 of BPM6, p 56.

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