Exploring New Ways of Measuring Multinational Enterprise Activity that Go Beyond the Use of Official Foreign Direct investment Data:

Accounting for Capital in Transit and Corporate Inversions
Foreign direct investment (FDI) data has traditionally been recorded by the immediate origin or destination of the investor. This makes the use of such data problematic for understanding multinational enterprise (MNE) activity because: (i) MNEs frequently transit capital via intermediary jurisdictions and (ii) offshore corporate inversions may obscure the real origin of the MNE. To further explore the extent of these practices and how they affect our understanding of MNE activity, this proposed doctoral research will concentrate on examining the case of outward FDI from OECD countries as well as several non-OECD emerging market countries. This proposed research in addition aims to advance an approach for measuring MNE activity that accounts for both capital in transit and corporate inversions and by so doing, provide a potential step forward in how we measure MNE activity. Recently, the OECD has acknowledged the significant distortionary impacts of both on conventional FDI data, highlighting the importance of this research.