Peter J Buckley's presentation at the FDI Statistics Workshop (20 March 2014) during the session on whether or not FDI statisics are still a useful metric when measuring investment globalisation. Find out more at http://www.oecd.org/daf/inv/measuring-globalisation-fdi-statistics-workshop-2014.htm

1. Leeds University Business School
Measuring Investment Globalisation: Are FDI
statistics still a useful metric?
OECD FDI Statistics Forum
Measuring globalisation: better data for better policies
OECD Conference Centre, Paris
20 March 2014
Professor Peter J Buckley
Centre for International Business
University of Leeds

2. Leeds University Business School
What do we want to know?
1. Control (of decision making).
2. FDI and its near neighbours in MNE network (‘Global Factory’).
3. Knowledge/Intangible Assets.
(Theory Driven)
FDI is a financial flow loaded with other flows – control and knowledge
included.

3. Leeds University Business School
Control
10% equity – “passthrough of control”.
Round-tripping.
Ultimate control linked to ultimate destination...
and the full network?

4. Leeds University Business School
Network: FDI and its near neighbours
‘Global Factory’ – Non-equity modes and FDI linked entities.
Control (Power) of MNE not fully captured by FDI because of use of
non-equity modes of international operation (NEMs).
Use of licences:
Contracts
Minority joint ventures
Technology agreements etc., etc.
It is arguable that control by contract is more rigorous than by
ownership.

5. Leeds University Business School
Knowledge – Intangible Assets
Externalisation of Operations
Internalisation of knowledge
(note profit from intangibles)
Control of knowledge, not financial capital, is critical and
FDI statistics are a poor proxy for this.