(Mis-) measuring MNE activity by using FDI data

Seminar with Sjoerd Beugelsdijk 8Nijmegen School of Management) arranged by Center for Strategic Management and Globalization:

(Mis-) measuring MNE activity by using FDI data: The size and nature of the mismatch between FDI data and operational data.

Abstract:

To measure MNE activity at the macro level, many scholars use FDI data. As FDI data are based on capital flows between home and host countries, a mismatch may exist between financial and operational activity.

Comparing operational sales data and FDI data of US MNEs, we find that the FDI data bias is a) country-specific, and b) related to the type, quality and structure of the host country’s financial market. The implication of this finding is that sample, research question and the FDI measure are interrelated, potentially leading to over- or under-estimations of the statistical results of FDI data-based studies.