The French statistics on enterprise groups and the

globalization

Raoul Depoutot, INSEE, FRANCEDominique Francoz, INSEE, FRANCE

The economic context

• Restructuring of economic activity

• Globalization

• Outsourcing

Outline of the presentation

• The statistical system to observe enterprise groups

• The economic use to follow up the globalization

• The ongoing projects

The organization of information on enterprise groups

LIFI

DIANE

DREE

TREASURY BOARD

SUSE

The survey on FInancial LInks (LIFI)

• The target population :

Firms reaching one of the following criteria :– Total amount of equity interest > 1,2 M€– Number of employees > 500– Turnover > 30 M€– Head of an enterprise group– directly controlled by a foreign corporation

The survey on FInancial LInks (LIFI), cont’d

• Information included in the questionnaire :– Identification characteristic of the surveyed firm

– Information on the shareholders

– Information on the affiliates or subsidiary of the firm

The survey on FInancial LInks (LIFI), cont’d

• Variables included in the questionnaire :

For each shareholder of the surveyed company

For each subsidiary or affiliate of the surveyed company

- ID number- activity

- % of capital

For the surveyed company : ID number, main activity, corporation name, adress, legal status, number of employees, total value of majority and minority interests

- corporate name- adress (nationality)

- percentage of voting rights

The LIFI survey, cont’dDesigning each group of enterprises

• Statistical unit : enterprise group

• Definitions :– Enterprise group– Head of the group– Core of the enterprise group– Extended enterprise group

100 %

40 %

S4

S1

S2S3

S5

S12

S11

30 %

40 %

20%

80 %

Source : Insee Poitou-Charentes – Service statistique – Pôle national « Liaisons Financières »

The survey on FInancial LInks (LIFI), cont’d

• Need to complete this information– Enlarge the target population– Have more information on foreign activity

(foreign affiliates and foreign parent companies)

– Add economic variables

The LIFI survey, cont’d :

Source : Insee Poitou-Charentes – Service statistique – Pôle national « Liaisons Financières »

If F1 surveyed

?

E1F3

F2F1

G2G1?

Trésor

E1

France

F2

Abroad

F1

G1

E2E3

?

F3

?

Dree

Diane

DIANE

• To enlarge the target population– Private database edited by COFACE SCRL

and BVD– Information published by the French

corporation courts– Data on small firms

The DREE survey

• To better cover the affiliates abroad– Survey on French affiliates followed up by

the commercial offices in the French Embassies

– To have information on the ultimate host– To have economic information on the

French affiliates abroad (turnover, employees)

The Treasury Board information

• To better cover the foreign parent companies– Administrative information– To have information on the ultimate

beneficial owner– To better attribute a citizenship to the

firms under foreign control

The SUSE data

• To include economic data– Result of both administrative and survey data– At the level of legal units– Available :

• Income statement• Balance sheet• Main activity code• Breakdown of sales by product• Workforce characteristics

Some results …

Number of enterprise groups 2002

Share of economic activity under foreign

controlFrench groups 24 302Foreign groups 7 031 22,4%Total 31 333

incl micro-groups (<=500 empl.)Number of legal units involved French legal units 89 527Legal units under foreign control 17 686 16,5%Total 107 213Number of employees ('000)French groups 11 995Foreign groups 1 952 14,0%Total 13 947Value added (in M€)French groups 616,0Foreign groups 130,3 17,5%Total 746,3Source : INSEE (LIFI , SUSE), DIANE (co-edition Bureau Van Dijk/COFACE SCRL)

The use of the LIFI data in the economic analysis of globalization

• The weight of foreign firms in the economic activity

Breakdown of resident corporations (France – 2002)

0

10

20

30

40

50

60

70

80

90

100

Number of corporations Value added Own capital Number of employees

Independent corporation

Corp. of a listed French EG

Corp. of a non-listed French EG

Corp. of a foreign EG

Development of the foreign controlled economy

Employees ('000)

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

French EGs

Foreign Egs

Independent companies

The use of the LIFI data in the economic analysis of globalization

• The weight of foreign firms in the economic activity

• Globalization and outsourcing of French activity

The use of the LIFI data in the economic analysis of globalization

6,0

2,0

3,8

2,0

Indep.

EGs3.5

100% Fr

Foreign

France RoW

Millions of Employees

The current and future developments

• To consider enterprise groups as statistical units– To define economic entities in the frame of

group which will be the collection units (profiling)

– To develop a statistical register of EGs– To produce consolidated economic data on

EGs– To integrate the EG as a data collection unit

The current and future developments, cont’d

• To develop a statistical register of EGs– To define the continuity of EGs

• Develop relevant concepts for EGs demography• Analyze the result of mergers / split off

– To coordinate with other French statistical offices

– To improve the registration of foreign corporation (abroad)

The current and future developments, cont’d

• To produce consolidated economic data on EGs– To avoid double counts on some variables

(Financial assets, sales)

The current and future developments, cont’d

S2Consolidation of sales:

  

2500

6000

2001500

300

S3

S1500

S2b

250150

500

= Economic flow

Statistical RealS1 3300 2500S2 6250 6000S2b 350 200S3 2000 1500

The current and future developments, cont’d

• To produce consolidated economic data on EGs– To avoid double counts on some variables

(Financial assets, sales)

– To have a better information of the international activity of MNEs

To produce consolidated economic data on EGs : an example

0

100000

200000

300000

400000

500000

600000

700000

800000

900000

1997 1998 1999 2000 2001 2002

Consolidated turnover - world

Consolidated turnover - France

The current and future developments, cont’d

• To produce consolidated economic data on EGs : some difficulties– Not compatible with the national territory

– No currently available for many EGS

– National sub-consolidation expansive

The current and future developments, cont’d

• To integrate the EG as a data collection unit– A first experience : the survey on intangible

assets (R&D and innovation, patents and licensing, marketing)

Thank you for your attention

Insee Poitou-Charentes – Service statistique – Pôle national « Liaisons Financières »