4 minute read

By Graham Pilgrim (Graham.PILGRIM@oecd.org) and Anna Wahlgren (Anna.WAHLGREN@oecd.org), Statistics and Data Directorate (OECD)

With trade and investment barriers falling, and transportation and communication costs declining, multinational enterprises (MNEs) are some of the most important actors in the global economy. In 2021, the top 100 MNEs generated over $11 trillion in revenues, equivalent to the combined GDP of Germany, France, Italy and Spain. They also play an increasing role in all of our lives, whether you’re buying a new car, surfing the web for your next holiday, or streaming your favourite song. However, despite their monumental scale, the cross-border nature of their activities can make them particularly difficult to measure through traditional statistical infrastructure and methods, especially in regard to the international efforts to ensure that these firms pay a fair share of tax wherever they operate and generate profits.

Why is information on MNEs so difficult to find and interpret?

Traditionally, national statistical offices (NSOs) are responsible for measuring, aggregating, and disseminating information on economic activity. But this is more difficult in the case of MNEs as they generally measure activity taking place within their own jurisdiction. Therefore, data on MNEs are often fragmented across numerous countries, each NSO holding a single piece of the puzzle, but with no one able to see the full picture. This is further complicated by confidentiality restrictions dictating that data reported to an NSO cannot typically be shared externally, even with other NSOs.

MNEs also often have vast and complex structures, which move and change over time. They are able to quickly and flexibly augment their operations, merging with or acquiring other companies (i.e. M&A activities), shifting the location of key activities, or otherwise restructuring. MNEs also vary greatly in their physical and digital presence. Google, for instance, has a far greater digital presence than a physical presence, with a domain for almost every jurisdiction in the world. At the same time, multinationals like oil and gas companies are highly asset driven, meaning their physical presence is more important. This compounds the measurement challenge for NSOs, with a clear role to be played by international organisations in helping to understand them in greater detail.

Introducing the OECD-UNSD Multinational Enterprise Information Platform

The OECD and the United Nations Statistics Division (UNSD) have joined forces to create the new Multinational Enterprise Information Platform. The new platform uses publicly available data to gather information on the world’s 500 largest MNEs, facilitating a comprehensive view of their physical and digital presence. It is more timely than similar structural databases, with data up to 2022, and provides a one-stop-shop for data users. Mutualising our efforts through this collaboration means less time spent on data collection and validation, and more time to focus on further development of the platform by adding new data sources and creating tools for users to interrogate the dataset. The platform also provides a valuable benchmark for NSOs and researchers, allowing them to compare the national presence of an individual MNE to the global presence.

Almost endless possibilities

The platform as it stands is just the starting point for an analysis of MNEs, their behaviour, and globalisation more broadly. The inclusion of multiple unique identifiers for each MNE (e.g. address, legal entity identifier, business register number etc.) means users can easily match their own data sources, adding building blocks, to approach a given analytical or policy question.

For example, adding data collected by the LeaveRussia initiative, among other sources, allowed OECD to approach the question of how the world largest MNEs were responding to the war in Ukraine (Figure 1). In short, results showed that most MNEs headquartered in the United States or Europe had announced their withdrawal or reduced their operations in Russia since the onset of the war, while close to half of Asian-based multinationals did not signal an intention to halt their activity (Knuttson, 2022).

Another key benefit of the platform is the ability to drill down into an individual MNE, without confidentiality concerns. For example, you might want to gather some intel on Intel. In the context of a global rush to develop and secure ever important computer chips, it is increasingly important to understand the giant companies that dominate the industry: TSMC, Intel, among others. Starting with Intel, we can identify 108 subsidiaries, with 38 in the United States and the rest spread over 32 other jurisdictions. Their digital presence is even more dispersed, with 160 websites across 53 jurisdictions. Meanwhile, despite TSMC’s larger market share, they have a narrower physical (26 subsidiaries across 10 jurisdictions) and digital presence (8 websites across 3 jurisdictions). But this is only the beginning: Explore the dashboard to find insights on a company which is important to you.

Figure 1: The OECD UNSD Multinational Enterprise Information Platform

Source: https://www.oecd.org/sdd/its/mne-platform.htm

What’s next?

The Multinational Enterprise Information Platform is already a robust foundation on which data can be linked and new insights built. However, this is an ongoing project, and our work is not finished. In the coming months and years OECD and UNSD will be working to link new data sources and refine the tools through which users can explore the data. For example, news tracking could be added to provide a live view of what is happening with a selection of the most important global firms – meaning you won’t miss any large restructuring events.