Globalisation in business statistics

For decades businesses have increasingly expanded their activities across borders. Eurostat provides users with a number of statistics capturing the globalisation of business activities.

The statistical capture of globalisation is not always straightforward, as statistics are usually bound to national borders. The globalisation of the world economy therefore creates new needs for statistics and, at the same time, it changes the conditions for the production of business statistics. Activities of multinational enterprise groups, the outsourcing of activities, foreign direct investment, and other forms of foreign engagement are key elements in this regard. Eurostat is engaged in a number of projects to develop new statistics on globalisation in business statistics in cooperation with national statistical institutes and international organisations.

Business statistics on globalisation

International trade in goods

European statistics on international trade in goods measure the value and quantity of goods traded between EU Member States (intra-EU trade) and goods traded by EU Member States with non-EU countries (extra-EU trade), with goods broadly defined as all movable property including electricity.

International trade in services

International trade in services covers trade in services as the transactions between residents and non-residents in a country. The term "services" covers a heterogeneous range of intangible products and activities that are difficult to encapsulate within a simple definition.  Services are the result of a production activity that changes the conditions of the consuming units (transformation services) or facilitate the exchange of products or financial assets (margin services).

Foreign affiliates

Foreign affiliate statistics (FATS) cover the structure and activities of enterprises that control enterprises abroad (outward FATS) or are controlled by foreign enterprises (inward FATS). In this context, enterprise A is deemed to be controlled by an enterprise B when B controls, whether directly or indirectly, more than half of the shareholders' voting power or more than half of the shares.

Foreign Direct Investment

Foreign Direct Investment (FDI) is the category of international investment made by an entity (direct investor) to acquire a lasting interest in an entity operating in an economy other than that of the investor. The lasting interest is deemed to exist if the investor acquires at least 10% of the equity capital of an enterprise.

International sourcing

International sourcing statistics capture the move of certain business functions that were performed in-house or domestically sourced by the resident enterprise to either non-affiliated (outsourcing to external suppliers) or affiliated enterprises abroad (insourcing). International sourcing is often referred to as ‘off-shoring’, ‘near-shoring’, ‘delocalisation’ or ‘outsourcing’.

Economic globalisation indicators

Reliable indicators are critical for policy-making, both at European and national level. In 2014 Eurostat published a set of economic globalisation indicators (EGIs) to provide an overview of the main trends in globalisation. They are based on data already available in the Eurostat database and have been constructed so that they can be meaningfully compared across countries. There are five groups:

  1. International trade

  2. Foreign direct investment (FDI)

  3. Employment

  4. Research and development (R&D)

  5. Value added

EuroGroups register

The EuroGroups register (EGR) is the central statistical register of Eurostat and of the statistical authorities of the EU and EFTA Member States, covering multi-national enterprise groups active in Europe. In order to create the EGR, Eurostat collects data of group members, their relationships and enterprise group information from the national statistical registers and complements them with commercial data. Based on these data the EGR creates the global structures of the multi-national enterprise groups.

The group structures and characteristics are distributed to national statistics compilers in all EU and EFTA countries. These coordinated populations can be used as the frame for compiling statistics related to and involving multi-national groups at national level. The EGR ensures that the national statistics compilers have a harmonised picture on the enterprise groups` structures and characteristics when compiling statistics related to globalisation as well as related to other enterprise statistics, involving a consistent delineation of cross-border phenomena.

More details on EGR can be found on the related Eurostat Statistics Explained article.

Profiling

Economic globalisation and the way the enterprise groups organise their production chains across national boundaries create challenges for economic and business statistics. Compilation of data on multinational groups cannot stop at the country border, but requires cooperation between Member States.

Profiling is defined as "a method to analyse the legal, operational and accounting structure of an enterprise group at national and world level, in order to establish the statistical units within that group, their links, and the most efficient structures for the collection of statistical data".

These statistical units are the profiled enterprises delineated within the group in accordance with Council Regulation (EEC) No 696/1993. They are ‘organisational unit producing goods or services which benefits from a certain degree of autonomy in decision-making, especially for the allocation of its current resources’.

More details on Profiling and profiled Enterprises can be found on the related Business registers recommendations manual