Investment Map
User Guide
For a better identification of investment opportunities
Market Analysis and Research (MAR)
Division of Market Development
I.
Introduction ... 1
II.
Selection Menu ... 4
III.
From the “Selection Menu” to the data modules... 8
IV.
Identification of potential sectors for inward investment ... 10
A. Overview of the data... 11
B. Analysis of FDI data ... 13
C. Analysis of foreign affiliates’ data ... 15
D. Analysis of the export data ... 17
E. Analysis of barriers to trade ... 24
F. Analysis of imports ... 25
V.
Analysis of countries competing for inward investment in potential sectors ... 29
VI. Analysis of investment sources in potential sectors ... 36
A. Data on foreign affiliates grouped by parent company ... 36
B. Outward FDI data by country ... 41
VII. Additional Country Information on FDI ... 44
A. Bilateral investment treaties and treaties of non-double taxation ... 47
B. Privatisation opportunities ... 48
C. Additional information on the comparison of host countries ... 48
VIII. Summary ... 50
Annex 1: Data limitations ... 51
A. Classification problems ... 51
B. Limitations specific to FDI data ... 51
C. Limitations specific to data on foreign affiliates ... 52
D. Trade data limitations ... 52
Annex 2: Definitions of FDI flows and stocks ... 54
Annex 3: How to read the bubble charts ... 56
A. Dynamic analysis ... 56
B. Structural analysis ... 58
Figure 1: Market Analysis Tools homepage ... 3
Figure 2 : Investment Map home page, English version ... 4
Figure 3 : The Selection Menu... 5
Figure 4 : Drop-down list of countries in the Selection Menu ... 5
Figure 5 : Tables that are directly accessible from the Selection Menu ... 6
Figure 6 : Country and sector selections ... 7
Figure 7: Country and sector selection - Indicators ... 8
Figure 8: The four data modules in Investment Map ... 9
Figure 9: Visualization on a bar chart of the FDI-receiving sectors in Brazil ... 13
Figure 10 : Bubble Graph of Brazil’s export portfolio ... 18
Figure 11 : Graph presenting export vs. inward FDI flows ... 19
Figure 12 : Detailed information for two of Nestlé’s affiliates ... 34
Figure 13 : Search by company data ... 34
Figure 14 : Search by keyword ... 35
Figure 15 : Affiliate’s details ... 40
Figure 16: FDI outward stock broken down by country on a world map ... 42
Figure 17 : Host country’s FDI determinants ... 45
Figure 18: Additional information ... 46
Figure 19 : Information on bilateral investment treaties ... 47
Figure 20 : List of treaties signed by a country ... 47
Figure 21 : Privatisation information ... 48
Figure 22 : Business regulations indicators (Doing Business Indicators) ... 49
Figure 23 : Bubble charts – Dynamic analysis ... 56
Table 1 : Information accessible through the Selection Menu ... 5
Table 2 : Information accessible through the four data modules ... 9
Table 3 : Analysis of Sectors with Potential to Attract Investment ... 10
Table 4 : Sorting the data by industry... 12
Table 5 : How to show additional FDI indicators ... 13
Table 6 : FDI flows and stocks ... 14
Table 7 : FDI flows over the past 10 years ... 15
Table 8 : Accessing foreign affiliates’ details ... 16
Table 9 : Data on foreign affiliates ... 16
Table 10 : Overview page with indicators for Brazil ... 17
Table 11 : Trade flow indicators ... 20
Table 12 : Food, beverages and tobacco exports ... 20
Table 13 : Exports in selected sectors ... 21
Table 14 : Export markets in the chosen sector ... 22
Table 15 : Export markets in the sub-region ... 22
Table 16 : Exports at the 6-digit level of the HS for the selected economic activity ... 23
Table 17 : Export markets at the 6-digit level of the HS ... 23
Table 18 : Analysis of tariffs faced by Brazilian exporters ... 24
Table 19 : Tariffs applied to products originating from Brazil ... 25
Table 20 : Analysis of dairy products imported by South Africa ... 26
Table 21 : Analysis of condensed dairy products in the world ... 27
Table 22 : Analysis of condensed dairy products in SADC ... 27
Table 23 : Analysis of applied tariffs by South Africa ... 28
Table 24 : Overview of the food industry in the SADC region ... 30
Table 25 : SADC, foreign companies in the food processing industry ... 31
Table 26 : South Africa, foreign companies in the food processing industry ... 31
Table 27 : Nestlé’s affiliates established in developing countries ... 31
Table 28 : Nestlé’s affiliates in SADC ... 32
Table 29 : Nestlé’s affiliates in South Africa ... 33
Table 30 : Results of a search by company ... 35
Table 31 : Access to the module “Outward FDI by sector” ... 37
Table 32 : Affiliates abroad in the food sector ... 37
Table 33 : Companies based in France having affiliates in developing countries in food processing ... 38
Table 34 : Danone’s affiliates in the developing country ... 39
Table 35 : French companies’ affiliates active in dried or condensed dairy products ... 39
Table 36 : SEGUR’s affiliates in developing countries ... 40
Table 37 : Outward flow by country in the food, beverage and tobacco sector... 41
Table 38 : Outward stock by country in the food, beverage and tobacco sector ... 42
HS Harmonized System
HS6 Harmonized System at the six-digit level IMF International Monetary Fund
IPA Investment Promotion Agency
ISIC International Standard Industrial Classification ITC International Trade Centre (ITC)
FDI Foreign Direct Investment
MIGA Multilateral Investment Guarantee Agency (World Bank Group) MFN Most Favoured Nation (WTO)
NTL National Tariff Line Code
OECD Organisation for Economic Co-operation and Development p.a. Per annum
SADC Southern African Development Community
SIC Classification nomenclature of the United States’ economic activities since 1987 ("Standard Industrial Classification Manual ")
TPO Trade Promotion Organisation
UNCTAD United Nations Conference on Trade and Development WAIPA World Association of Investment Promotion Agencies WEF World Economic Forum
WID World Investment Directory (UNCTAD publication)
WIR World Investment Report (annual publication by UNCTAD) WTO World Trade Organisation
Acknowledgements
This User Guide has been prepared by Luigi Lannutti, with the assistance of Gregory Sampson, under the supervision of Christian Delachenal, Trade Map and Investment Map manager. We also wish to acknowledge Pitchaya Eam-On and Cindy Bi for their comments and suggestions.
Note
: Please note that the information in Investment Map undergoes regular updates throughout
the year as new information becomes available. These updates may generate varying information from what is seen in this User Guide, however the principles and applications of Investment Map remain the same.
I.
Introduction
International trade and FDI, traditionally perceived as different means to penetrate markets, have increasingly become complementary and both have witnessed strong growths during the last decades. While in 1990 global FDI flows stood at US$ 207 billion, in 2011 they reached US$ 1.5 trillion, with developing and transitions economies accounting for 51% of global FDI flows1. World exports of goods also experienced a relevant growth in the same period from US$ 3,449 billion to US$ 18,217 billion2. Furthermore, intra-firm trade and trade in intermediate goods gained more and more importance along with globalization (intra-firm trade of US affiliates accounts for 8% to 10% of US exports and for 20% to 25% of US imports3 in 2009).
A combination of different factors can explain the tremendous growth of international trade and investment. These include reductions in custom duties and transportation costs, as well as political events, such as the creation of new states in Eastern Europe and Central Asia and their transition to market economies.
These trends have contributed to the intensification of the international division of labour and the rise of vertical FDI to the detriment of horizontal FDI. The latter has been traditionally used to penetrate protected markets (tariff-jumping FDI) or markets characterized by high transportation costs, while the former allows firms to optimise their production process (efficiency-seeking FDI) and subsequently reduce costs.
In summary, FDI and international trade are becoming increasingly complementary and are creating new business opportunities.
In this context, trade and FDI promotion must be undertaken jointly and in a coherent manner. This explains why, in about 15 countries, trade and FDI promotion activities are both undertaken under the supervision of a single institution4.
Investment promotion agencies (IPA) are faced with the following questions:
Which sectors have a strong potential to attract FDI in my country? In particular, which sectors are the most attractive to export-platform FDI and which ones present interesting prospects for import substitution?
Which countries are my main competitors in attracting inward investment in my country’s most attractive sectors? Which rival countries have had the greatest success at attracting foreign investment in their most attractive sectors?
Which foreign companies could be interested in investing or re-investing in my country? And in which particular sectors or products? What are the main companies active in the sub-region or in my competitors’ country?
Where are foreign-owned companies located in my country? Where are their headquarters? What are their contact details?
In this regard, ITC, which has traditionally focused its activities towards the promotion of trade, and UNCTAD, which plays an active role in the promotion of FDI in developing countries, have combined their efforts to develop the Investment Map. Investment Map provides a user-friendly application that combines FDI data, trade flow data and tariffs. In response to users’ needs, company data on foreign affiliates located in developing countries has also been included.
Investment Map has been primarily developed to assist institutions or analysts with the questions listed above. Investment Map is intended to assist Investment Promotion Agencies (IPA) to identify
1
“World Investment Report (WIR) - Toward a new generation of investment Policies”, UNCTAD, 2012.
2
WTO online statistics database at http://stat.wto.org/, WTO, 2012.
3
“The Global Enabling Trade Report 2012, Reducing Supply Chain Barriers” World Economic Forum (WEF), 2012
4
potential sectors for FDI attraction and target groups of investors. Investment Map is also a great tool for Trade Promotion Organisations (TPO) as well as market analysts, who wish to integrate FDI statistics in their studies.
An understanding of a country’s strengths and weaknesses is essential for IPAs and TPOs. The undifferentiated promotion of FDI attractiveness across all sectors, very fashionable twenty years ago, no longer corresponds to today’s market reality. Today’s market is marked by strong international competition for FDI. As such, the targeting of potential sectors and investors is crucial for IPAs because it enables them to better manage their resources and to concentrate their efforts on potential investment channels.
Investment Map has been developed jointly by the Market Analysis and Research section (MAR) of the ITC with UNCTAD (www.unctad.org) and in partnership with the Multilateral Investment Guarantee Agency (MIGA) and the World Association of Investment Promotion Agencies (WAIPA). Investment Map is not only useful for IPAs and TPOs, but the public and private sector can also benefit greatly from this web-based tool, as it enables them to:
identify potential investment projects targeting regional and international markets;
better focus on export development constraints in specific markets such as high tariffs, and hence serve as a guide for trade negotiations;
provide a benchmark for self-competitiveness assessment;
give advice on how to improve the investment and business environment;
Investment Map’s primary assets are its considerable geographical coverage, its combination of foreign direct investment, trade and tariff data with information on foreign affiliates.
Information available on Investment Map consists of:
total FDI flows and stocks for more than 200 countries and territories,
FDI flows and stocks organised by industry (ISIC revision 3) and by partner country for more than 110 countries,
data on exports and imports, as well as indicators on trade potential for approximately 200 countries,
data on the tariffs applied by over 180 countries and on tariffs faced by over 200 countries and territories,
information on the location, sales, employment and parent company of over 150'000 foreign affiliates operating in developing countries or in transition economies (for more than 1’000 business lines classified under the US’ SITC classification).
FDI data is collected directly by ITC thanks to the continued collaboration of official national sources. Trade flow data is sourced from the ITC’s online database on global trade flows, Trade Map (www.trademap.org/), and from the United Nations Statistics Division’s (UNSD) COMTRADE ITC’s. Trade data in Investment Map is updated once a year. Tariff data is sourced from ITC’s Market Access Map database (www.macmap.org), which is frequently updated. Information relating to affiliates is updated on an annual basis and is purchased from Dun and Bradstreet, a global leader in microeconomic data collection and distribution that maintains the highly regarded database "Who owns whom".
The classification of economic activities in Investment Map is based on the ISIC nomenclature (International Standard Industrial Classification), revision 3. Trade flows and tariff data is available not only at the industry level, but also at the deeper level of 6 digits of the Harmonized System for approximately 5,300 product lines. Trade flow data (imports and exports) is available for the last four years. Finally, the information on affiliated companies in developing countries is also sorted by
economic activity and it is based on the 4-digit level of the US SIC87 nomenclature, which includes 1'000 business lines.
The major data limitations relate mostly to difficulties encountered in the data collection process, to the reliability of FDI flow and stock data and to classification issues. These limitations are explored in the reference material available on-line and are also covered in Annex 1. These limitations are particularly problematic when analysing cross-country data for a given sector.
The terms of use and subscription options are available at www.intracen.org/marketanalysis (Figure 1). All subscribers need to register in order to access the Investment Map database through a username and password. The same log-in details will be valid to access all ITC’s Market Analysis Tools – Trade Map, Market Access Map, Investment Map and Standards Map. For further information, please feel free to send an e-mail to [email protected].
Figure 1: Market Analysis Tools homepage
This user guide is designed to serve two different functions. Those readers, who would like a quick introduction on how to use the tool avoiding detailed explanations, should concentrate on the paragraphs with two vertical straight lines next to them. This will provide them with a hands-on tutorial designed to introduce them to Investment Map’s main functions.
However, we strongly recommend all readers to follow all the explanations in order to better understand the features of the Investment Map tool.
Type the following URL address: www.investmentmap.org into your Internet Address bar. Figure 2 shows the English home page of Investment Map, how to access the French or Spanish versions of the tool and where to enter username and password in order to access the Investment Map. After entering your login details, press “enter” or click on the “Log in>>” button to enter the Investment Map
We invite you to examine the information accessible through the Investment Map home page, especially under the "reference material" section. You will find information on the classification
Create your new account to the tools here
systems used as well as on the data sources and data limitations. It is also possible to download a copy of the user guide (this document) or take a guided tour.
Figure 2 : Investment Map home page, English version
II.
Selection Menu
Once logged in, you will be automatically redirected to the Selection Menu. The Selection Menu enables a direct access to the different types of information available in Investment Map. Other ways of retrieving and assessing the information are described in the next chapters.
The Selection Menu provides a direct access to FDI statistics and foreign affiliate information. You are able to choose the direction of FDI (inward or outward), the country and/or the sector of interest and the type of information to retrieve: you can choose among “Indicators”, “FDI flows”, “FDI stock” and “Foreign affiliates”. Table 1 describes the type of information that you can directly retrieve from the Selection Menu.
Click here to change the language
Enter your username and password here
Table 1 : Information accessible through the Selection Menu
The Selection Menu allows you to assess the country- or sector-specific information available in the tool. You may type in the name of a country and retrieve country-specific FDI and foreign affiliate information broken down by recipient industry, OR you may type in the name of an industry and retrieve industry-specific FDI and foreign affiliate information broken down by country of origin or destination, depending on the direction you chose. A country AND an industry may also be chosen in the query, if you want to assess the situation of a specific sector in a specific country.
Figure 3 : The Selection Menu
When the requested information is available, the corresponding button will highlight (if the four buttons are highlighted, all four pieces of information are available). The Selection Menu also provides a direct link to the industrial classification used in Investment Map (see link “Industrial classification” beside the “Sector” tab).
Like in Trade Map, you only need to start typing in the country/sector tab and the system will provide you with a list of all the items containing the letters you typed in, as shown in Figure 4.
Figure 4 : Drop-down list of countries in the Selection Menu
Button Description
Indicators
General overview of the most recent FDI and international trade trends, as well as of the country/sector information on foreign affiliates, sorted by sector of destination or by country of origin/destination (depending on the choices made in the above tabs)
FDI flows Historical series of inward/outward FDI flows, detailed by sector or by country (depending on the choice made in the above tabs)
FDI stock Historical series of inward/outward FDI stock, detailed by sector or by country (depending on the choice made in the above tabs)
Foreign affiliates
Detailed information on foreign affiliates, sorted by sector of destination or by country of origin/destination (depending on the choices made in the above tabs) Choose the direction of FDI Choose a country AND/OR a sector
The tables in Figure 5 provide an example of the different pieces of information that can be directly accessed from the Selection Menu. The example is based on Brazil’s inward FDI and the sector of “food and beverages” manufacturing was chosen.
As figure 5 shows, in the case of Brazil’s inward FDI stock, the sector breakdown of FDI is not available. Please, also note that when a country is chosen in the Selection Menu, results are broken down by economic sector, while when a sector is chosen the information is broken down by country. The Selection Menu also allows a direct access to country-specific information broken down by partner country. You can obtain this information by selecting at the same time a country AND a sector. Please note that “Total (merchandise and services)” has to be chosen as a Sector to retrieve the country breakdown of the selected country’s FDI, as shown in Figure 6.
Figure 6 : Country and sector selections
As you can see in Figure 6, not all the buttons are available at all times. On the top figure the information on “Foreign affiliates” is not available for the chosen sector, as this particular information is only available for specific sectors of the economy or when no sector is chosen. The second line of Figure 6 shows that the button “FDI stock” is not available, as Brazil did not report any data on inward FDI stock in the sector of “Textile, clothing and leather” manufacturing.
The button “Indicators” will be available for any query. When a country and a sector are chosen, the country or the sector of your choice will be highlighted in yellow on the result page, as shown in Figure 7.
Figure 7: Country and sector selection - Indicators
III.
From the “Selection Menu” to the data modules
The Selection Menu works by redirecting you to the exact page with the information you were looking for. The different pages in Investment Map are classified under four main modules that are in the top of all the pages of the tool. These modules are: “Inward FDI by country”, “Inward FDI by sector”, “Outward FDI by country” and “Outward FDI by sector” and you can see them in Figure 8.
Figure 8: The four data modules in Investment Map
Table 2 describes the type of information available under each data module. Please, note that the information retrievable under the data modules is also retrievable directly from the Selection Menu. Table 2 : Information accessible through the four data modules
Module Description
Inward FDI by country
Country-specific information on inward FDI, foreign affiliates
established in the country, international trade and tariffs. Information is broken down by sector.
Inward FDI by sector
Sector-specific information on inward FDI, foreign affiliates
established in the country, international trade and tariffs. Information is broken down by country.
Outward FDI by sector
Sector-specific information on outward FDI, foreign affiliates established abroad and international trade. Information is broken down by country.
Outward FDI by country
Country-specific information on outward FDI, foreign affiliates established abroad and international trade. Information is broken down by sector.
From now on, the user-guide will follow a comprehensive path which will guide you through the identification of the most FDI-attractive sectors and potential investors. It will provide you with a strategy to assess countries and sector’s FDI attraction potential starting from the data available in Investment Map.
IV.
Identification of potential sectors for inward investment
We want now to identify the most attractive sectors in a specific economy. In the Selection Menu, we will therefore choose “Inward FDI” as direction, we will type in the name of a country and we will start our analysis by clicking on “Indicators”. This will lead us to the module "Inward FDI by country", which provides answers to two questions frequently asked by IPA’s:
Which industries have attracted FDI in my country?
Which sectors have the potential to further attract FDI in my country?
The module “Inward FDI by country” contains four tabs that are located above the column headings of the table and provide different types of information on foreign direct investment (FDI), foreign affiliates, international trade and tariffs.
Start by selecting Brazil from the drop down menu next to "Select country", as shown below:
By default, the different sectors are ranked by the size of their inward investment flows from high to low. As a result, for each country, those industries that have attracted the highest foreign investment in the last available year are shown in the top of the table, assuming that data is available.
Table 3 : Analysis of Sectors with Potential to Attract Investment
In order to identify sectors with the highest potential to attract FDI, it is useful to undertake the analysis from the perspective of a potential investor. You should ask yourself: What are the main motives for investment? Why should a company prefer my country over another?5
5
This issue can also be conceptualised in terms of "push factors" which push investors to internationalise their activities and "pull factors" that attract/pull investors to a given country. The interested reader can find more on this topic in Chapter IV: "Drivers and Determinants" of the "World Investment Report" 2006 edition.
We can distinguish 4 reasons why investors would invest abroad: i) Market-seeking FDI
ii) Efficiency-seeking FDI iii) Resource seeking FDI iv) Asset-seeking FDI
These factors are not mutually exclusive. Instead, together, they determine the likelihood of positive returns on an investment. The development of a global market has increased the importance of these factors and has forced firms to seek new markets and locations to reduce their production and maintenance costs in order to remain competitive.
Access to raw materials remains the main driving force behind FDI in sub-Saharan Africa while access to new technologies plays an important role in encouraging FDI directed towards developed countries.
The combination of data on inward FDI flows and information on foreign affiliates allows identifying the economic activities that have been most stimulated by FDI. As we will see in this section, Investment Map can help users identify new market opportunities.
Table 3 identifies those economic activities that have been stimulated by FDI. Brazil is characterised by inward FDI in nearly all sectors of its economy.
A. Overview of the data
You can sort the economic activities by the type of industry (primary in yellow, secondary in blue and tertiary in pink) by clicking on the heading “Industry“, as shown in table 4.
Brazil has successfully attracted significant investment in its extraction industry. FDI in such sectors is motivated primarily by the search for raw materials, while there is a number of other forms of investment in other big sectors, that include considerations.
The information can be displayed at different levels of aggregation and by type of activity. Generally speaking, by clicking on the symbol, you can access more detailed data, while clicking on the symbol returns you to a broader overview. You can also rank the industries according to numerous criteria (for example by the number of exports, number of foreign affiliates, etc) by clicking on the arrows ( symbol) located at the top of each column.
Table 4 : Sorting the data by industry
You can also click on the sign of the main tabs, located at the top of the columns and beside the column headings to access further indicators. For example, click on this symbol to view the wide array of information on FDI stocks and flows, as shown in table 5.
Click here to classify industry by sector
Click here to view information at the macro sectors level (primary, secondary and tertiary)
B. Analysis of FDI data
Table 5 : How to show additional FDI indicators
Figure 9: Visualization on a bar chart of the FDI-receiving sectors in Brazil
By clicking on the link “See chart” under the heading “Foreign Direct Investment”, as indicated in Table 5, you will be able to visualize the information on FDI-receiving sectors on a bar chart, which will open up in a pop-up window. As indicated in Figure 9, once opened the pop-up window, you will be able to choose among inward/outward flow/stock information, the country and the year of reference, whether you want to assess the information at an “aggregated” (sectors aggregated at
Click here to get the wide array of information concerning FDI Click here to visualize the
the level of primary, secondary and tertiary sectors) or “detailed” (detailed sectors as in Figure 9) level. You can also choose how many sectors you want to visualize on your bar chart.
By clicking on the red arrows as shown in table 6 you will be able to retrieve annual inward FDI flows or stocks for the last ten years along with the corresponding sector breakdowns (if available). Select one of the arrows to expand the corresponding column. You are now in the module “Inward FDI by country” and therefore you will be able to retrieve historical series of inward FDI only.
Table 6 : FDI flows and stocks
The data shown in table 7 indicates a constant rise in FDI flows since 2001 in all sectors. However, it is possible to observe also certain volatility in FDI flows between 2002 and 2004 and between 2008 and 2010. Volatility can be explained by the fact that FDI is generally characterised by large, one-off monetary transactions such as mergers or acquisitions. The different components of FDI flows and stocks are explained in Annex 2.
Click here on the red arrows to retrieve the historical series of FDI for the last 10 years
By clicking on the red arrow again, as shown in table 7, the column will condense. Note that you can also use the "Back" button on your web navigator.
Table 7 : FDI flows over the past 10 years
FDI data broken down by sector is, unfortunately, not available for all countries. In the example of Brazil, data on inward stocks is only available for the economy as a whole. In order to tackle this problem of insufficient data availability and in order to help users better identify those sectors which have attracted FDI in the past, foreign affiliates data has been included in Investment Map. This data source is also very useful for IPA’s trying to identify target groups of investors. This is covered in more detail later on.
C. Analysis of foreign affiliates’ data
The two columns under the heading "foreign affiliates" show the number of foreign affiliates present in the country and the number of parent companies (direct investors) that have affiliates in the country. In order to expand the information on “foreign affiliates”, click on the sign next to the “Foreign Affiliates” heading as shown in table 8.
Table 9 shows the indicators available in “Foreign Affiliates” sub-module. We now have information on the individual affiliate’s sales, as well as the number of employees. These two types of information are unfortunately not systematically reported by all affiliates. This explains why the sales column includes two numbers. The first one shows the sum of the sales generated by the affiliates, while the second one, shown in brackets, indicates the number of affiliates that have reported this information. In the same way, we also include two figures for the number of employees. The first one shows the number of employees, while the second one shows the number of affiliates reporting this information. You should be aware that the number of employees is more systematically reported than the sales figure. However, these figures cannot be considered as statistically relevant.
Click here to go back to the previous available options and indicators
Table 8 : Accessing foreign affiliates’ details
For Brazil, we find that multinationals are important players in all sectors of the economy. They create a large number of jobs in the wholesale and retail trade and through the production of equipment goods (machines and material). The affiliates’ turnover, despite being estimated on an incomplete statistical basis, is also very important.
The "Recently established" column displays the number of companies that have been created since 2000 and have been reported in the database. The date of the creation of the firm, however, may not be recorded.
The last two columns provide information on the leading foreign company (parent company) and investing country, in terms of number of affiliates in the country.
Table 9 : Data on foreign affiliates
The joint analysis of FDI and foreign affiliate data enables you to identify those industries that have been successful at attracting FDI. Those industries can also be considered as potential attractions for more FDI for a number of reasons. Firstly, IPA’s may feel more confident supporting existing firms that wish to reinvest profits or expand their activities.6 Secondly, the presence of a number of
6
Some IPAs, such as that in Norway, which already have numerous transnational companies located in their country, focus their efforts on improving the services provided to existing investors, as a way to encourage expansion or reinvestments by those firms.
Click here to obtain further
information about foreign affiliates established in the country
Click here to view more information about foreign affiliates located in the country in the sector of interest (see Chapter V for company data – pag. 27)
firms with a history of successful growth can encourage related or rival companies to follow suit and invest in the country.
Potential future FDI is not limited to those sectors with a recent history of attracting FDI. The analysis of trade flows also identifies which markets could be targeted by foreign investors.
Let us first provide a general list of the different markets that can be targeted by investors: i) the domestic market
ii) the regional market iii) the international market
We will begin by looking at instances in which the country is being used as an export platform to access regional and international markets. In order to undertake our analysis, we must assess the export portfolio of the targeted country. The portfolio can be analysed either in the form of a table or in the form of a bubble graph.
D. Analysis of the export data
When you are on the overview page with the indicators (i.e. you chose a country in the “Selection Menu” and clicked on “Indicators”), you can also asses trade information. Click on the link “See chart” under “International Trade – 2010”, as shown in Table 10. This will open a separate window visualizing the country’s export profile on a bubble graph, as shown in Figure 9.
Table 10 : Overview page with indicators for Brazil
There are two types of bubble graphs used in Investment Map. The first, illustrated in Figure 9, analyses the export performance in statistical or structural terms (structural analysis), whereas the second one illustrates the export performance in a dynamic framework (dynamic analysis). The graphs are explained in detail in Annex 3.
The graphs are inspired by portfolio models, which are used extensively in marketing. The models, such as the Boston or General Electric ones, are usually applied to large firms. The bubble graphs apply the portfolio models to the analysis of a country’s export portfolio. While they differ in their interpretation from the original models, the intuition behind the Investment Map’s bubble graphs is the same.
The graph puts Brazil’s market share of exports into perspective by comparing it to the growth in world trade. This shows whether the country is specialised in high-growth sectors or not. The size of the bubbles is proportional to the value of Brazilian exports in the corresponding industry.
Click here to view additional information on international trade
Click on the icon to visualize export data on a bubble graph
In Brazil’s case, we can see that the country has a fairly diversified export portfolio, which includes a variety of primary products (yellow bubbles) and diverse manufactured goods (blue bubbles). Generally speaking, the country specialises in industries characterised by a strong world export growth. This is considered a good sign.
Figure 10 : Bubble Graph of Brazil’s export portfolio
It is also possible to analyse the export portfolio (structural analysis) in relation to the intensity of inward FDI flows for the year under analysis. Select the graph "Export vs. Inward flows" from the drop down box, as shown in Figure 10.
Click here to select another bubble graph
Figure 11 shows a graph comparing Brazil’s exports and inward FDI flows. It is very similar to the graph shown in Figure 10, with the major difference being that the bubble colour varies depending on the value of the inward FDI in the selected year. This is explained in detail in the graph’s legend/explanatory notes at the bottom of the graph (see Figure 11).
For Brazil, the graph indicates that nearly all of the exporting industries have experienced considerable inward FDI over the course of the last available year (2010 in this case). The two biggest sectors in terms of exported value are the production of food and the extraction industries. They are also characterised by important inward FDI flows. In conclusion, the graph shows that inward FDI and exports are strongly correlated in Brazil. Now let us investigate the main export markets.
Figure 11 : Graph presenting export vs. inward FDI flows
From the overview page with the indicators –close the window showing the graph, if you are following the suggested path – click on the icon as shown in Table 10 to expand on the information on international trade. Click on the column’s heading “Exports” to rank the industries in terms of decreasing export value.
Table 11 includes numerous indicators. In addition to the value of exports and imports, we also find the world market share, the annual change of exports over the last for years (since 2007 in this user-guide), an indicator of world trade growth, the level of net trade (export-imports), the net trade in relative terms and its change over the last four years (since 2007 in this userguide).
Table 11 : Trade flow indicators
Brazil’s food manufacturing sector, which is characterised by significant inward FDI flows, has the highest activity in terms of export turnover. The sector also generates a strong trade surplus and exports are growing at a constant rate.
In order to analyse the trade performance of this industry in greater depth, click on the icon as shown in Table 11.
Table 12 : Food, beverages and tobacco exports
Table 12 shows that almost two thirds of the food, beverage and tobacco industry’s exports come from the “Production, processing and preservation of meat, fish, fruit, vegetables, oils and fats”. The export of beverages, dairy products and cereals is only a marginal activity in comparison.
Click here to analyse the sector in depth
Click here to analyse the industry in depth
Click on the icon as shown in Table 12 to obtain more detailed information on the “Production, processing and preservation of meat, fish, fruit, vegetables, oils and fats” industry arranged by product.
Table 13 : Exports in selected sectors
Table 13 shows the main products exported by Brazil, as categorised under the six-digit Harmonised System (HS). The three leading products account for 50% of Brazil’s exports in this sector.
In order to identify which markets are the major importers of Brazilian products categorised under the "Production, processing and preservation of meat, fish, fruit, vegetables, oils and fats" click on the blue numbers relating to this sector, as shown in Table 13. This opens a separate window showing the annual value of Brazilian exports for the last 4 available years, from 2007 to 2010, together with the destination countries. The result is shown in Table 14. As a general rule, in Investment Map, whenever a number is shown in blue, by clicking on it you can access more information on the country of origin or destination of trade or investment flows.
Within our selected category, Brazil’s exports have nearly doubled over the last four years. In particular, exports to China nearly tripled over the last four years, although Russia and the Netherlands remained the largest importers in 2010. The last column shows the average tariffs applied to Brazil’s exports by the different countries, as shown in Table 14.
Brazil’s strength in such a sensitive sector, which is characterised by high barriers to trade, demonstrates the extent of Brazil’s competitiveness. This suggests that following the liberalisation of international markets, Brazil would be well positioned to take advantage of new opportunities for trade.
Click here to analyse the export markets of the specific industry
By using the drop down menu, next to “Select Country”, you can restrict the number of countries being examined. There is a number of pre-defined sub groups (to which Brazil belongs) to choose from. As an example, select MERCOSUR, to see the equivalent of Table 15.
Table 14 : Export markets in the chosen sector
Table 15 : Export markets in the sub-region
Table 15 indicates that exports to other MERCOSUR countries are rather low in this sector, even though tariff exemptions exist. In order to better understand this phenomenon, it seems sensible to analyse performances at the product level.
Close the pop-up (Table 15). In order to look at the exports at the product level, click on the icon next to “Production, processing and preservation of meat, fish, fruit, vegetables, oils and fats”. This will provide more details on the different products found under this category, as shown in Table 13. Now click on the number representing Brazil’s exports of "Soya-bean oil-cake&oth solid residues, whether or not ground or pellet" (HS code 230400) to the world (as shown in Table 16). This opens a new pop-up window listing the major importers of Soya-Bean etc., as shown in Table 17.
Click here to select a group of partner countries
Click here to select a group of partner
Table 16 : Exports at the 6-digit level of the HS for the selected economic activity
By clicking on the blue number indicating the value of exports for the selected product, you are actually opening up a session in the separate application of Trade Map (www.trademap.org). Table 17 ranks the export markets of a given country at the 6-digit level of the HS. We can now see that, for this product, Brazil exports mainly to European and Asian countries.
If you have registered to Investment Map, which is also valid for Trade Map, you will be able to undertake various further analyses, including analysing data at a more detailed level (at the 8-digit level or more of the National Tariff Line level) or identifying your competitors in a particular market.
Table 17 : Export markets at the 6-digit level of the HS
Click here to analyse the export markets at the 6-digit level
E. Analysis of barriers to trade
In Investment Map, click now on the icon next to the “Tariffs” heading.
Table 18 shows the tariffs faced by Brazilian exporters and the import tariffs applied by Brazil to foreign imports. We are now going to look at the customs duties faced by Brazilian exporters at the product level, for the sector "Production, processing and preservation of meat, fish, fruit, vegetables, oils and fats". This gives us an indication of Brazil’s market access conditions for these products and enables us to better assess Brazil’s competitiveness.
Table 18 : Analysis of tariffs faced by Brazilian exporters
By clicking on "Details on faced tariffs" as shown in Table 18 it is possible to see Brazil’s market access conditions for the product "Soya-bean oil-cake&oth solid residues, whether or not ground or pellet " (HS code 230400). The page opens in a separate pop-up window.
The new window has opened a separate session in the tool of Market Access Map
(www.macmap.org). Table 19 shows the tariffs faced by the country’s exporters in the international
markets for the selected product. We can see that Austria, a country which belongs to the European Union, applies a 0% tariff rate under the WTO’s MFN agreement. The EU’s customs duty exemption for this product can help to explain how Brazil has managed to penetrate the EU’s market. However, as we can see, there are other markets that apply higher customs duties to products originating from Brazil.
Click here to analyse the tariffs faces by your country at the product level
As shown in Table 19, you can rank the partner countries by the level of protection, by clicking on the heading "Level of protection" or "Total ad valorem equivalent tariff".
Table 19 : Tariffs applied to products originating from Brazil
By clicking on the heading “Level of protection”, you can sort the information by tariff level. On the top of the list you will be able to see the countries applying the highest tariff barriers to Brazil for the selected product. This type of information is crucial for Brazilian governmental agencies, as it enables them to prepare for bilateral, regional or multilateral negotiations.
In terms of FDI, this information is important as it enables the government to better assess the export potential of Brazil toward international export markets. Tariff trade barriers are an initial hurdle in almost all export markets that the trade-related governmental institutions may target. Low tariff barriers applied to a country may work as an incentive for foreign companies to establish a foreign affiliate in that country and export from there (export-platform FDI).
The Market Access Map table also includes the column "total ad valorem equivalent tariff", which refers to the “ad valorem equivalent” tariff that the country faces when exporting the selected product to a specific market. If your country or institution has a subscription to Market Access Map, you can undertake a more detailed analysis, for example, at the tariff line level.
F. Analysis of imports
We are now going to investigate the potential for FDI to substitute imports to the domestic and regional markets. To this end, we are going to analyse the import flows.
The value of imports can indicate the potential gain from substituting these imports by encouraging local or regional production with the help of FDI. This is known as the import substitution effect of FDI.
From the Investment Map overview page with indicators, we will now be able to assess the potential of South Africa to attract import-substitution FDI. From the drop down menu select South Africa.
Click here to sort the information by “Level of protection”
Click on the icon located on the top of the “International Trade” column. This expands the heading, introducing a number of extra indicators of international trade. Click on the column "Imports" to rank the different industries by their import value. Now let us focus our attention on the food processing sector, which we have already been examining for Brazil. The heading “Food, beverages and tobacco” should be already expanded from earlier. If not, you can expand the group by clicking on the icon next to the industry label. >ou will see a number of different sub-groups within the selected sector. Let us concentrate our analysis on an even deeper industry level. Click on the icon next to the "Manufacture of dairy products" industry to show the different sub-markets within that industry. You should now have a table similar to Table 21.
South Africa is a net importer of dairy products. The imports are significant (over $12 million) for the product "040210 - Milk powder not exceeding 1.5% fat". It would appear that there may be potential for significant import substitution for that product.
For analysis at the sub-region level, click on the heading "040210 - Milk powder not exceeding 1.5% fat", as shown in Table 20, in order to access the world-trade country-breakdown for this product.
Table 20 : Analysis of dairy products imported by South Africa
This information provides further details to analyse how countries are competing to attract foreign investment. The information on imports by industry and by country shows you the position of a country relative to its competitors in a given industry from an import substitution perspective. Table 21 includes the same indicators we looked at previously. There are, however, a few differences. For example, measure of the exports per capita or as a share of GDP is now included. This allows us to analyse the contribution of the exports in relative terms, by relating them to the size of the economy. The last two columns indicate whether we used "mirror" data (data based on the statistics reported by partner countries) and the latest available year for the trade data.
Click here to analyse the data by country for this product or industry
Table 21 shows the data for all the countries in the world. We can group this data by sub-region. Click on the drop down menu, as shown in the table and select the "Southern African Development Community (SADC)". You should now see the equivalent of Table 22.
Table 21 : Analysis of condensed dairy products in the world
Table 22 shows that the SADC countries are all net importers of the product "040210 - Milk powder not exceeding 1.5% fat". This is encouraging in terms of FDI attraction in this sub-region. Now let’s analyse South Africa’s supply networks.
Table 22 : Analysis of condensed dairy products in SADC
Click on the number that corresponds to South Africa’s imports of the selected product, as shown in Table 22. This opens a separate window run by Trade Map that lists the different suppliers of the product "040210 - Milk powder not exceeding 1.5% fat” to South Africa. For instance, we can now see that Australia, New Zealand, Argentina and Ireland are all large exporters of this product to
Click here to select a sub-group of countries
Click here to analyse the supply sources for this product
South Africa. In the same way, this information can be accessed for all the other countries in the group by clicking on their import values in the "Imports" column. This will enable the assessment of and comparison with the supply networks established in the other SADC countries. For instance, it may be of particular interest to look at the other large importing markets, such as Mauritius or Mozambique.
We find that the major direct and indirect suppliers of “Milk powder not exceeding 1.5% fat” to the SADC countries are Australia, New-Zealand, Singapore and the United Arab Emirates (which is probably re-exporting the product).
Now let us see whether preferential trade conditions exist for producers within the SADC region for a given product. Close the Trade Map window and return to the Investment Map interface. Click on the icon next to the "Tariffs" tabs. This expands the tariff rates information by introducing two new columns with details on faced and applied tariffs. Now click on the "Details on applied tariffs" line corresponding to South Africa. This opens a separate window which shows a number of countries exporting this product to South Africa and the tariffs they face. By default, only 10 countries are shown per page. As shown in Table 23, however, you can select the "Show all" option from the drop down menu to view all the records relating to your query. Now click on either the "Level of protection" or "Total ad valorem equivalent tariff" headings. This will allow you to rank the level of tariffs from the lowest to the highest.
Table 23 : Analysis of applied tariffs by South Africa
As we can see in Table 23, South Africa applies a 0% tariff rate to condensed milk for all its trade partner countries.
In conclusion, Investment Map has allowed us to identify a product with a good potential for “import substitution” FDI. It enabled us to identify the potential domestic and regional markets for this product, as well as providing details of the customs duties applied. This may be the basis to develop an analysis on whether it may be convenient to go and produce locally a product that would otherwise be exported to region.
In addition, it is necessary to look at the local production conditions, such as the availability of raw materials (milk, sugar), logistics (transport and storing facilities) and material (required equipment). This analysis is generally undertaken by sector experts.
Select “50” to view 50 records relative to your query
We can also investigate the customs duties imposed in other markets for condensed milk that originate from SADC countries. Close the new window and return to the main Investment Map window. Now click on “Details on applied tariffs” for either Mauritius or Mozambique. This, once again, opens a new window through the Market Access application. The window shows a number of countries exporting this product to Mauritius or Mozambique and the tariffs they face. By default, only 10 countries are shown per page. Once again, select the "Show all" option in the drop down menu to view all records relating to the query. Now click on either the "Level of protection" or "Total
ad valorem equivalent tariff" headings. This again allows you to rank the level of tariffs from the
lowest to the highest. Mozambique applies higher tariffs to non SADC-members: this customs behavior may encourage FDI by enabling outside firms to gain access to a protected market. In economic literatures, this form of import-substitution FDI is known as “tariff-jumping” FDI.
V.
Analysis of countries competing for inward investment in potential
sectors
Now let us investigate a second set of questions that IPA’s generally consider:
What are the main countries competing for inward investment in our targeted sector?
Which countries, in my sub-region, have experienced the most success at attracting foreign investors in the markets I am planning to target?
What are the main companies active in the sub-region or in competitor countries?
The Investment Map "Inward FDI by sector" module attempts to answer these questions. The module “Inward FDI by country” has enabled us to identify the potential for FDI to promote import substitution. It has also suggested, as in our example, the countries competing with South Africa for investment in the market of dairy products manufacturing (specifically the product "040210 - Milk powder not exceeding 1.5% fat") are mostly other SADC countries.
However, another interesting aspect for external investors must be highlighted. At a first glance, it would appear that there is little difference among SADC members as potential FDI-destinations for an investor targeting the South African market, as it would benefit from the same reduced internal tariffs in any country belonging to the SADC. At the same time, for instance, South Africa and Mauritius do not apply any customs duties to non-SADC importers, and, as such, do not provide any advantage to SADC producers. For Mozambique, SADC countries have a slight advantage over non-SADC importers. Within the SADC, the product is subject to tariffs of 5%, while countries outside the SADC region face tariffs of 10%. Investing in Mozambique would allow the firm to avoid these tariffs while still having the same access to the Mauritian market.
The analysis is, however, incomplete. While tariffs represent an important consideration for investors, there are a number of other aspects which affect their final investment decision. Other economic factors, such as electricity costs, abundance of labour skills, wage rates, raw materials availability as well as political considerations, such as the political stability and rules and regulations regarding foreign investment, play a significant role. Particularly important issues, from an investor’s perspective, are the possibility to repatriate profits, the protection given to investors, the ease of access to land and the existence and extent of tax exemptions. These aspects are analysed in the last section of the guide, which focuses on additional country-specific information concerning FDI. In this section, we are going to take a look at the capacity of Investment Map to analyze a country’s overall ability to attract FDI into a given industry. Countries with a successful export track-record in a given industry or product are likely to attract the attention of foreign investors, as similar economic activities may also result attractive to foreign capitals.
Close the "Market Access Map" windows and return to the general overview page on Investment Map. Click on the icon next to the heading "Tariffs". This will minimise the heading and bring you back to the general data overview. You will notice that the industry selected in the drop down menu (next to “Select Industry”) is now the “Manufacture of dairy products", and not the product at the 6-digit level of the HS nomenclature. This is because the FDI and foreign affiliate’s information is not available under the disaggregated categories of the HS nomenclature.
The table contains little information available on FDI or about the foreign affiliates active in this sector. More information may be obtained by looking at a broader sector. Scroll up to select “Food, Beverages and Tobacco” from the drop down list next to “Select Industry”, as illustrated in Table 24. Table 24 : Overview of the food industry in the SADC region
First, we notice is that the information is incomplete. This is because not all members of the SADC have consistently reported inward FDI data for the selected industry. Secondly, the data on foreign affiliates shows that South Africa is not the only country in the SADC with numerous foreign affiliates. Other SADC countries, such as Mauritius or Tanzania, have also attracted foreign companies in the food processing industry.
Now let us investigate, in detail, the companies operating in SADC. This allows us to gain a better understanding of the types of enterprises and activities already present in the region. We will look at the foreign affiliates operating in the dairy products sector.
Click on the icon next to the “Foreign Affiliates” heading. This expands the information on the foreign affiliated companies in “Food, Beverages and Tobacco” in the SADC region. For instance, it gives us details on the leading foreign company active in this sector. In our example of South Africa, this is Sabmiller Plc. Click on the name of the enterprise as shown in Table 25. This opens a new window which gives you a list of foreign affiliates in South Africa (Table 26). Let us look at the Nestlé’s affiliates. To do so, click on the company name "Nestlé" as shown in Table 26. This opens a list of countries in which Nestlé’s foreign affiliates are active (Table 27).
Select the industry of interest
Table 25 : SADC, foreign companies in the food processing industry
Table 26 : South Africa, foreign companies in the food processing industry Click on the
company’s name
Click on the company’s name
Table 27 : Nestlé’s affiliates established in developing countries
As shown in the list of countries where Nestlé S.A.’s foreign affiliates are active (Table 27), South Africa is well placed among other developing countries in terms of number of foreign affiliates and number of jobs created. What can we say about the relative position of other SADC countries? From the drop down menu, select “Southern African Development Community (SADC)”, as shown in Table 27, to obtain a table showing Nestlé’s economic activity in the sub-region (Table 28).
Table 28 : Nestlé’s affiliates in SADC
The list of foreign affiliates of Nestlé active in our subgroup (Table 28) shows that, apart from South Africa, there are affiliates of Nestlé in four other countries which belong to the SADC. In order to get more detailed information on Nestlé’s affiliates in South Africa, click on the country name as shown in table 28.
Click on the company’s name
Choose a group of countries
Table 29 : Nestlé’s affiliates in South Africa
We now have a list of four Nestlé’s affiliates established in South Africa. We also have information on the cities they are based in and some information, although incomplete, on their sales, starting year and number of employees. The information would suggest that the main turnover in the country comes from cocoa-based products. This can be deduced from the "Line of business" information, which informs us of each affiliate’s leading activity, as measured by the amount of turnover it generates. It is, however, likely that each affiliate also engages in other, smaller, lines of business. Click on the name of each affiliate, starting with the first one. This opens a separate window with a detailed fact sheet on the selected affiliate of Nestlé’s.
Figure 12 compares two fact sheets taken from the list of Nestlé’s affiliates established in South Africa. We can now see that Nestlé (South Africa) (Pty) Ltd, which is based in Ranburg, operates in three main lines of business. As well as its primary business, cocoa and cocoa based products, it also engages in producing dried, condensed or evaporated dairy products and cheese. The other affiliate, Nestlé South Africa (Pty) Ltd, is based in Johannesburg and only engages in the production of chocolate and cocoa products.
The search for potential investors can also be made by using the search-by-company facility. Choose the module "Company" in the main task bar in the upper part of the screen as indicated in Figure 13. The query can be made by host country or home country. In this case, click on the tab "search parent companies" as indicated in Figure 13.
Figure 12 : Detailed information for two of Nestlé’s affiliates
Figure 13 : Search by company data
Different criteria for your search of company data are offered. You can for example search for companies which their name contains a key-word (such as "carrefour") or select all companies headquartered in a given country.
The module “Company” also allows you to look for all foreign affiliates delivering a specific product or service. In order to illustrate this option, follow the instructions highlighted in Figure 14. As an example, enter first the key-word "milk" in the appropriate box. Investment Map will propose you different products (based on HS labels) and their corresponding business lines (based on the SIC nomenclature) including the key word in their description. Use the scrolling bar to display all the proposed products and business lines and tick the box corresponding to "Dry, condensed and evaporated dairy products" as indicated in Figure 14, point 2. After that, click on the "submit query" button.
2. Choose this sub-module to search the database by parent companies
1. Click here to get into the module « Company »
Figure 14 : Search by keyword
Table 30 shows the results of the query. More than 100 records have been found. Each record corresponds to a foreign affiliate producing dry, condensed and evaporated dairy products and located in a developing country. Only 25 records are displayed on the screen at the same time. You can obtain more records by clicking on the page numbers on the top of the table, as shown in Table 30. You can also click on each column heading in order to sort the records according to different criteria, such as the name or home country of the parent company. You can also click on each affiliate's name in order to obtain detailed information about it. Finally, you can refine your request by modifying your query, for example by limiting the research scope to some countries. However, any query is limited to a maximum of 500 records.
Table 30 : Results of a search by company 1. Enter a keyword
2. Thick the corresponding box
3. Launch the query
Display more records
What can we conclude from our analysis? By looking at the import flows and the barriers to trade within this product group we have identified a high potential in South Africa and within the SADC region for the production of dairy products. We have also discovered that several other SADC countries are competing to attract foreign investors producing dairy products. Despite the fact that South Africa does not provide a special comparative advantage in terms of preferential tariffs among SADC countries, it has, nonetheless, demonstrated a strong competitive position in the last decade in terms of number of foreign affiliates producing food and dairy products.
We have also seen that there may be potential to attract investment in the other SADC countries, for example in Mozambique and Mauritius, which are already producing industrialised milk with the help of foreign investors. These two countries also benefit from better market access conditions among the SADC countries. This is only an initial analysis and, as mentioned earlier, there are a number of other factors that determine the investor’s final decision on where to locate, and these other factors will be discussed in depth in the next chapters.
VI.
Analysis of investment sources in potential sectors
In the previous section we have learnt how to identify broad sectors, as well as specific markets, with the potential to attract FDI. In order to further assist IPA’s in targeting potential FDI partners, Investment Map also includes a range of information on the affiliates of foreign companies active in the country. This provides a full package of information which enables users to identify foreign affiliates active in competing countries and retrieve their contact details. In doing so, Investment Map aims to help IPAs to answer the following questions:
Which foreign companies would be interested in investing in my country in the targeted industrial sector?
Where are those foreign companies located? How can I contact them?
In this section, we are also going to take a look at the decision of where to locate from an investor’s perspective. Investment Map can provide valuable information to help understand the factors motivating the investor’s decision to establish some activities in a foreign country.
A. Data on foreign affiliates grouped by parent company
Close the two small windows that we opened in the previous section. You will recall that one of them listed the foreign affiliates in South Africa while the other provided more in depth information on each affiliate. When you have closed both of these windows you will return to the main Investment Map screen (as shown in Table 31). Click on “Outward FDI by sector” as shown in Table 31. This action switches the perspective from which the data is organised and provides a list of the main countries investing abroad in the sector of interest, rather than a list of the host countries that have attracted investment.
Right now we are still looking at the sub-group of SADC countries. Select the drop down menu shown in Table 32 and scroll up to select "All Countries". We now have a list of all the countries that provide FDI in the targeted sector worldwide.
Table 31 : Access to the module “Outward FDI by sector”
Table 32 : Affiliates abroad in the food sector
Table 31 shows a list of countries with the potential to invest abroad. They are ranked by the number of foreign affiliates belonging to national MNE’s. There is also information about the amount of sales, the number of employees and the name of the leading parent company. It is important to keep in mind that this information only takes into account affiliates located in developing countries. Now let us investigate a group of companies which headquarters is located in a country in which you are particularly interested. For instance a country which your country have recently concluded a bilateral investment treaty with (see section B of this same chapter at page 40). In our example, we will look at affiliates originating from France. Follow the second step shown in Table 32 and click on the leading parent company in France, "Danone". This opens a new window with a list of parent companies located in France ranked by the number of affiliates they have in the developing world.
1. Select “All countries”
Click here to switch perspective
2. Click on this parent company
