This publication was produced by the Central Statistics Office in order to provide more information to the user regarding the impact which Foreign Direct Investment (FDI) has in Ireland.
This section makes use of published FDI data to impute a return on FDI. The return on FDI is defined as:
| r in, t = | FDI income debitst |
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| Inward FDI positions | ||
| r in, t = | FDI income creditst |
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| Outward FDI positions | ||
This definition differs slightly from the definition offered in the OECD Benchmark Definition of Foreign Direct Investment, 4th Edition (BMD4) in that it includes debt income as part of FDI income. This departure from the prescribed definition was made in order to ensure confidentiality protection. In addition, the income on debt is small relative to the income on equity, only marginally affecting the returns.
This publication presents employment data based on administrative data sources, namely the Revenue Commissioners' P35L dataset of employment. The Revenue Commissioners' P35L file contains a complete register of all employments and is the most accurate source of remuneration. It provides details of gross pay and number of weeks worked in the year for all employments. The annual P35 data is based on the number of all jobs held by employees during the year. Before using personal administrative data for statistical purposes, the CSO removes all identifying personal information including the PPSN. The Personal Public Service Number (PPSN) is a unique number that enables individuals to access social welfare benefits, personal taxation and other public services in Ireland. The CSO converts the PPSN to a Protected Identifier Key (PIK). PRSI classes K and M (associated with pensions) were removed for the purposes of this analysis.
Employment, for the purposes of this section is defined as the number of permanent employees working in a foreign-controlled affiliate during a given year. This includes full-time and part-time workers. In order to mitigate the distorting affect which counting a temporary wage as an annual salary would have, a number of temporary employees are included as one employee (where their cumulative weeks of insurance amounted to a full year).
This section details the employment in the controlled subset of foreign affiliates, as defined by the Foreign Direct Investment Relationship (FDIR). As part of the FDIR, control is defined as majority (greater than 50%) ownership of the foreign affiliate. A direct investment enterprise is defined by the presence of influence by a non-resident parent. Influence is quantitatively defined as the ownership of 10% or more of the direct investment enterprise by the direct investor.
This data is sourced from administrative data (employer-level p35 returns) of employed individuals in the Irish economy, which is subsequently matched to employer-level enterprise identifiers. The location of ultimate ownership, or of the Ultimate Controlling Parent, is then sourced from the Balance of Payments database and Business Register surveys, in order to assign enterprise level variables such as ownership location and NACE Rev.2 classification to be added to the employing affiliates. This definition differs conceptually from the presentation of the Return on FDI statistics, which are presented on an Immediate Partner Country basis.
Following on from the previous section on employment, this section uses the p35 data file. Average wages are defined as follows for sector i:
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Ӯi = |
Total pay for all employees insured in sector i Total number of employee insured weeks in sector i |
and for a group of subsidiaries controlled from one country j:
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Ӯj = |
Total pay for all insured employees in enterprises controlled from country j Total number employee insured weeks in those enterprises |
Employees are therefore comprised of all types of workers (full-time, part-time, permanent, temporary etc). It is important to note therefore that this average wage metric should not be deemed to be indicative of the average remuneration for a full-time employee working for the whole year. Instead, it is intended to show the wage differential between sectors and countries who employ individuals through foreign-owned affiliates in Ireland.
In this section an Irish multinational enterprise (MNEs) is defined as a company with Irish ultimate ownership, which earns more than half of their sales revenue from abroad. The domestic wage is calculated as the average wage of the remaining companies (those which do not have foreign ownership and those who are not considered to be Irish MNEs).
This disaggregation of FDI stock in Ireland was created by separating out FDI into subsidiaries in the year that the subsidiary in question was birthed for CSO data collection. There is often a time-lag between the birth of an enterprise in Ireland (when it was registered with the CRO) and the accumulation of a significant FDI stock.
The value of Greenfield FDI, for the purposes of this publication, is defined as the portion of new FDI arising as a result of the birth of these subsidiaries for CSO data collection in that same year of birth. As the metric depicted considers the accumulated stock of FDI, it captures all of the investment into the enterprise since the date that the enterprise was birthed in Ireland.
The enterprise at the top of the ownership chain i.e. not controlled by any other entity. The geographical location of the ultimate source of control of the stocks of inward FDI for a reporting economy is used in this publication to present inward FDI, employment and average wages by ultimate ownership of the foreign affiliate.
The parent influencing or directly controlling a direct investment enterprise. This presentation is used to present the return on FDI in chapter two of this publication.
The economic sector classification used in this publication is based on the ‘Statistical Classification of Economic Activities in the European Community (NACE Rev.2)’ which can be accessed on the Eurostat website. The NACE code of each enterprise included in the survey was determined from the predominant activity of the enterprise, based on information provided to the CSO.
Affiliated enterprises are enterprises in a direct investment relationship. Thus, a given direct investor, its direct investors, its subsidiaries, its associates, and its branches, including all fellow enterprises, are affiliated enterprises. It is possible for a given enterprise to be a member of two or more groups of affiliated enterprises.
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