5. Number of enterprises 4.64. The number of enterprises (or establishments,
where that is the statistical unit) meeting the criteria for
coverage by FATS statistics is a basic indicator of the
prevalence of majority ownership by foreigners in the
host economy. That number may be compared with the
total number of firms (or establishments) in the
economy. It may also be assessed in relation to the other
FATS variables because it allows the computation of
ratios - such as value added or number of employees per
enterprise - that may be compared with the same ratios
for domestically owned firms, thus giving an indication
of the behaviour of foreign affiliates.
4.65. It should be recognized that the number of firms
alone may not give an accurate picture of the overall
importance of foreign-owned firms, because of
differences in size between these firms and those that are
domestically owned. If the foreign-owned firms tend to
be larger, for example, then their share in the total
number of firms would be smaller than their share in the
various measures of operations and would thus tend to
understate the role and importance of these firms in host
country economies.
4.66. Typically, information on numbers of enterprises
will be a natural by-product of collection of data on
other FATS variables, rather than a separate object of
the data-collection effort. As such, the number is likely
to be affected, often significantly, by the level of
company consolidation and by thresholds for reporting
on surveys. To assist users in interpreting counts of
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Trade with related enterprises is defined to include trade with
all enterprises with which there is a direct investment
relationship.
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enterprises (or establishments), countries are encouraged
to indicate in explanatory notes how the numbers were
derived.