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GTAP Resource #3809

"A Global Database of Foreign Affiliate Sales"
by Fukui, Tani and Csilla Lakatos

This paper produces a new dataset to further the literature on the behavior of FDI. The dataset is foreign affiliate sales data on a three dimensional basis, by host country, source country and sector. The dataset comprises 226 host countries, 226 source countries, 37 sectors. The estimation undertaken in this paper also serves as an input into a FDI-GTAP model that permits the analysis of the behavior of foreign affiliates within the context of a general equilibrium model.

Until recently, the lack of available data on the activities of foreign affiliates has often compelled researchers to use FDI stocks as a proxy for foreign affiliate operations data. FDI and FAS reflect different facets of the role of multinationals in the world economy. FDI statistics are a measure of the monetary value of the movements of capital between investors and affiliates and they are a component of the capital account of a countrys balance of payments. By contrast, FAS cover data regarding overall operations of foreign affiliates such as sales, production, and employment. In this study, we are able to use the Eurostat database. This database, with its large number of sector-level, bilateral observations on foreign affiliate sales and production, permits us to examine the relationships between various host and source country factors and the foreign affiliate activity produced by them. Further, the large number of excess zeros in the Eurostat dataset is handled using techniques borrowed from the trade literature, which also experiences a “zeros” problem. In addition, this paper exploits the detailed level of the data by introducing sector-specific variables which in turn permit out of sample predictions, critical to our ability to construct the global database. Coefficients produced in the econometric estimation are used in a quadratic optimization program, along with data from the OECD, UNCTAD and the BEA to produce a foreign affiliate sales dataset that is internally ...

Resource Details (Export Citation) GTAP Keywords
Category: 2012 Conference Paper
Status: Published
By/In: Presented at the 15th Annual Conference on Global Economic Analysis, Geneva, Switzerland
Date: 2012
Created: Fukui, T. (4/23/2012)
Updated: Lakatos, C. (8/9/2012)
Visits: 4,069
- Foreign direct investment

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