Statistics in Focus

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Statistics in Focus Foreign-controlled enterprises Between 9.2% and 19.8% of value added in Denmark, Spain, France, the Netherlands, Portugal, Finland and Sweden was generated by foreign-controlled enterprises lllllllllllllllllllllllllllllllllllllllllll Statistics Michaela Schneider in focus Figure 1: Contribution of foreign-controlled enterprises to value added in seven Member States, 1999 (%) INDUSTRY, TRADE 30,0 AND SERVICES 25,0 20,0 THEME 4 – 3/2003 15,0 Contents 10,0 5,0 Foreign-conrolled activity in the economies..................................2 0,0 DK E F NL P FIN S Inter-temporal development of foreign control within three Business Economy Manufacturing Industries Services Member States...........................4 Activities attracting foreign enterprises .................................5 Main findings based on pilot study results for Denmark, Spain, France, Luxembourg, the Netherlands, Portugal, Finland and Sweden: Breakdown of foreign controllers..................................5 ¨ The share of total value added generated by foreign-controlled enterprises in 1999 in the business economy of Denmark, Spain, France, the Netherlands, Portugal, Finland and Sweden varied between 9.2% in Denmark and 19.8% in Sweden. ¨ In contrast, foreign-controlled enterprises accounted for less than 1.0 % of the total number of enterprises in the business economy. ¨ Between 6.3% (Portugal) and 17.1% (Luxembourg) of all persons employed worked for a foreign-controlled enterprise. ¨ The most attractive activities for foreign enterprises in terms of value added were NACE Sections D, manufacturing, and G, distributive trade. ¨ Portugal accounted for the highest share of intra-EU control in terms of value added with 72,4%. +) ¨ The main extra-EU foreign controllers in terms of value added were Manuscript completed on: 18.12.2002 located in the USA. ISSN 1561-4840 Catalogue number: KS-NP-03-003-EN-N © European Communities, 2003 Data collection on foreign-controlled Denmark, Spain, Ireland, the for the first time. No data for Ireland enterprises began with the collection Netherlands, Finland, Sweden and and the United Kingdom are yet of data for reference year 1996. The the United Kingdom had already available and they are not included results presented in this Statistics in taken part in previous data in this report; however they will be Focus are data for reference year collections, France, Luxembourg published in Eurostat’s NewCronos 1999 for eight Member States. While and Portugal took part in the project database. Foreign-controlled activity in the economies Interpreting the data: 1. As the statistics available do not always comprehensively cover all economic activities, it was decided not to publish data on absolute levels, but only on shares of foreign-controlled enterprises in the whole economy. However, even this should be viewed with caution because the average size of foreign-controlled enterprises is considerably larger than the average figure for the whole economy. In addition, the Foreign Affiliates Trade Statistics (FATS) population is usually less than the population of the whole economy (e.g. only large enterprises are surveyed) and thus the share of foreign control is underestimated. 2. The notion of control implies the ability to direct an enterprise and determine its strategy. This ability can be exercised by an investor holding the majority (more than 50%) of the shares. Neither enterprises controlled by the reporting economy nor enterprises under multiple minority ownership are included in the FATS population. Enterprises under multiple minority ownership are those with two or more shareholders (foreign or of the reporting economy) each holding between 10% and 50% of the shares. 3. In calculating the aggregates for the business economy, manufacturing industries and services, different aggregations have been used for different countries because data were missing for individual activities in individual reporting countries. As such, results for different countries can represent different activity coverage which may imply under- or overestimation. Table 1: Contribution of foreign-controlled enterprises to business economy in eight Member States, 1999 (%) Number of Value added at factor Number of persons Member State Turnover enterprises cost employed 1) Denmark 0.4 10.5 9.2 7.2 Spain 0.5 18.9 15.4 8.8 France 0.5 17.0 15.6 14.2 Luxembourg* 0.8 23.2 : 17.1 Netherlands 0.7 22.3 17.4 10.3 Portugal 0.4 14.3 13.2 6.3 Finland 0.9 16.2 13.7 12.2 Sw eden 0.9 22.1 19.8 15.7 1) For France and Luxembourg the number of employees is used as a proxy Table 1 presents an overview of the was in Sweden, where nearly one- controlled enterprises (6.3%). impact of foreign-controlled fifth of the value added was In most countries the share of enterprises within the business generated by foreign-controlled enterprises under foreign control in economy in eight Member States. It enterprises. the business economy is greater in shows that foreign affiliates account Measured in terms of employment, terms of turnover and value added for a significant share of turnover the highest level of foreign control than in terms of employment. This and value added and a low share of was recorded in Luxembourg shows that labour productivity is number of enterprises. (17.1%), whilst the highest share of higher for foreign-controlled Whilst less than 1.0% of enterprises value added (19.8%) was found in enterprises. As Tables 2 and 3 are foreign-controlled, the share of Sweden which - together with show, this is particularly true in the turnover generated by foreign- Finland - also had the highest share manufacturing industries. controlled enterprises varied of number of enterprises (0.9%). between 10.5% and 23.2%. The The lowest shares of number of share of foreign-controlled enterprises (0.4%), turnover (10.5%) enterprises in total value added and value added (9.2%) were all exceeded 10% in six Member States recorded in Denmark, whilst and was slightly below only in Portugal had the lowest percentage Denmark (9.2%). The highest share of persons employed in foreign- 2 Statistics in focus — Theme 4 — 3/2003 ————————————————————————— ) Table 2: Contribution of foreign-controlled enterprises to manufacturing industries in eight Member States, 1999 (%) Number of Value added at factor Number of persons Member State Turnover enterprises cost employed 1) Denmark 0.5 11.4 12.1 8.8 Spain 0.8 29.0 25.4 15.0 France 0.4 13.0 20.3 13.0 Luxembourg* 2.8 33.3 : 23.3 Netherlands 0.9 24.0 20.2 12.7 Portugal 0.4 15.4 14.4 7.5 Finland 0.8 15.3 14.3 13.9 Sw eden 1.0 25.4 24.4 19.9 1) For France and Luxembourg the number of employees is used as a proxy Table 3: Contribution of foreign-controlled enterprises to market services in eight Member States, 1999 (%) Number of Value added at factor Number of persons Member State Turnover enterprises cost employed 1) Denmark 0.4 10.0 7.0 6.1 Spain 0.4 12.7 7.6 5.4 France 0.5 15.9 11.7 14.0 Luxembourg* 0.5 17.5 : 8.3 Netherlands 0.6 21.2 14.6 8.8 Portugal 0.4 13.5 12.1 5.1 Finland 0.9 17.0 13.0 10.5 Sweden 0.9 19.7 15.6 12.6 1) For France and Luxembourg the number of employees is used as a proxy Tables 2 + 3: Regarding turnover, biggest differences were found for There were two exceptions: in value added and employment, Spain with differences of 16.3 and Finland and France turnover was foreign control is relatively less 17.8 percentage points respectively. higher in the market services than in important in market services than in For employment the biggest manufacturing industries. manufacturing industries. For difference was in Luxembourg with turnover and value added, the 15.0 percentage points. Table 4 shows the distribution of industries, whilst a vast majority of In Spain 17.2% of the foreign- foreign-controlled enterprise activity foreign-controlled enterprises controlled enterprises were in between manufacturing industries - between 60.2% in the Netherlands manufacturing industries, but and the service sector. It shows that and 84.0% in Luxembourg - were in generated 72.3% of value added the majority of foreign-controlled fact in the service sector. The and employing 60.6% of the persons value added, ranging from 52.6% in differences in the number of persons working in foreign-controlled Portugal to 72.3% in Spain, was working for a foreign affiliate in the industries. generated by foreign-controlled manufacturing industries and enterprises in the manufacturing service sectors were narrower. Table 4: Distribution of foreign-controlled enterprise activity between manufacturing industries and service sector in eight Member States, 1999 (%) Number of persons Number of e nter pr ises Turnover V alue adde d at f act or cos t Member employed 1) State Manuf ac tur ing Manuf ac tur ing Manuf ac tur ing Manuf ac tur ing Industries Services Industries Services Industries Services Industries Services Denmark 33.3 66.7 37.4 62.6 56.1 43.9 39.5 60.5 Spain 17.2 82.8 58.2 41.8 72.3 27.7 60.6 39.4 France 35.7 64.3 56.9 43.1 59.4 40.6 47.6 52.4 Luxembourg* 16.0 84.0 35.9 64.1 : : 58.4 41.6 Netherlands 39.8 60.2 42.0 58.0 57.8 42.2 48.0 52.0 Portugal 30.5 69.5 43.1 56.9 52.6 47.4 59.0 41.0 Finland 29.2 70.8 45.5 54.5 58.2 41.8 55.4 44.6 Sw eden 27.6 72.4 48.2 51.8 58.4 41.6 53.9 46.1 1) For France and Luxembourg the number of employ ees is used as a proxy ) ———————————————————————— 3/2003 — Theme 4 — Statistics in focus 3 Development of foreign control over time within three Member States Interpreting the data: Comparisons over time of data on foreign controlled enterprises need to be viewed with caution.
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