2.1 The results of the 2001 SIMSDI update show that there have been marked improvements in both the availability of FDI statistics, particularly position data, and in the application of a number of the recommendations of the international standards for compilation of FDI statistics. However, there are still areas where the majority of countries do not yet follow the international standards. Box 2.1 summarizes (1) the areas where there have been marked improvements since 1997; (2) the areas where more than 75 percent of the 61 countries that participated in the 2001 update now follow the international standards applicable to their economies at present; and (3) areas where, despite improvements, the majority of the 61 countries do not yet follow the international recommendations.
5.1 The Benchmark and the BPM5 recommend the use of the Current Operating Performance Concept (COPC) to measure direct investment earnings. According to this concept, the earnings of an enterprise consist of its income from normal operations before accounting for nonrecurring items and capital gains and losses. Operational earnings of the direct investment enterprise should be reported after provision for depreciation of capital and income and corporation tax charged on these earnings have been deducted. Direct investment earnings should not include any realized or unrealized capital gains or losses or exchange rate gains or losses made by either the direct investment enterprise or the direct investor. The earnings should also not include writeoffs, such as inventory write-offs, write-offs of intangibles, write-offs of bad debts, or write-offs on expropriations without compensation. Many enterprises use the All-Inclusive Concept to measure earnings. On the basis of this concept, income is the amount remaining after all items (including capital gains and losses and write-offs) that cause any increase or decrease in the shareholders’ or investors’ interests during the period are taken into account. Because data for many countries are available only on an all-inclusive basis, those countries that report earnings on either an operating basis or an all-inclusive basis are recommended to collect and publish supplementary information on holding gains and losses and other extraordinary items. This practice would enhance international comparability for both the transactions data and the position data.
6.1 Direct investment capital is capital provided by a direct investor, either directly or through other direct investment enterprises related to that investor, to a direct investment enterprise. Conversely, direct investment capital is capital received by a direct investor from a direct investment enterprise. Direct investment capital includes equity capital, reinvested earnings, and other capital involving various intercompany debt transactions. Direct investment capital includes only funds actually provided; funds for which the direct investor merely makes the arrangements or guarantees repayment are not considered to be direct investment capital.
7.1 In principle, all external financial assets and liabilities should be valued at the market prices prevailing on the date they are recorded in the FDI statistics. However, there are some recognized departures from the market-price principle. For direct investment, values recorded in the balance sheets of direct investment enterprises (book values) are often used to determine the value of the stock of direct investment. If these balance-sheet values are recorded on the basis of market prices prevailing on the balance sheet date, such values are generally in accordance with the market-valuation principle. However, if balance sheet values are based on historical cost or on interim, but not current, revaluations, such balance-sheet values do not conform with the market-valuation principle.
8.1 Some types of enterprises or activities warrant special mention. The SIMSDI survey sought information on the treatment of a number of these special cases: namely, quasi-corporations arising from construction enterprises and the operation of mobile equipment; cross-border real estate transactions; transactions with offshore enterprises and Special Purpose Entities (SPEs); and the treatment of expenditure on natural resources exploration.
This Selected Issues paper focuses on the Baltic model, Baltic–Nordic links, and convergence. The Baltic countries form a distinct group within a tightly integrated Nordic–Baltic region. They are following similar approaches to economic policy, broadly in line with those of Northern European and the Anglo-Saxon countries. Their macroeconomic policies are generally robust. The paper examines the possible causes of the creditless recoveries in the Baltic countries. It characterizes their experience in comparison with other episodes of creditless recoveries in both advanced and emerging market economies, and also investigates demand and supply constraints to credit expansion in the Baltics.
International standards for measuring foreign direct investment (FDI) have become important in today’s global economy, where multinational enterprises exercise economic clout and FDI statistics can reflect investor sentiment about the climate of investment in a country. This joint IMF/OECD report assesses progress toward standardization in the compilation of FDI statistics and provides information on statistical methodologies in 61 countries. The report is based on data from the 2001 update of the joint IMF/OECD Survey of Implementation of Methodological Standards for Direct Investment (SIMSDI), which covers 30 OECD countries and 31 other IMF member countries
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This paper examines how 12 “major depreciations” between 1997 and 2000 affected different measures of firm performance in a sample of over 13,500 companies from around the world. Results suggest that in the year after depreciations, firms have significantly higher growth in market capitalization, but significantly lower growth in net income (when measured in local currency). Firms with greater foreign sales exposure have significantly better performance after depreciations, according to a range of indicators. Firms with higher debt ratios tend to have lower net income growth, but there is no robust relationship between debt exposure and the other performance variables. Larger firms frequently have worse performance than smaller firms, although the significance and robustness of this result fluctuates across specifications.
1.1 This report examines the current practices regarding the statistical measurement of foreign direct investment (FDI) of the 30 Organisation for Economic Co-operation and Development (OECD) countries1 and 31 of the other International Monetary Fund (IMF) member countries that participated in the 1997 Survey of Implementation of Methodological Standards for Direct Investment (SIMSDI).2 It is based on information obtained from the 2001 update of the SIMSDI. The report should provide useful information for FDI analysts and policymakers and indicates progress made in moving toward accordance with the agreed international standards for FDI data compilation that have been established by the IMF and OECD.