• Login
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
  • Home
  • News
    • General
    • Political
  • Economy
  • Business
    • Agribusiness
    • Aviation
    • Banking & Finance
    • Energy
    • Insurance
    • Manufacturing
    • Markets
    • Maritime
    • Real Estate
    • Tourism
    • Transport
  • Technology
    • Telecom
    • Cyber-security
    • Cryptocurrency
    • Tech-guide
    • Social Media
  • Features
    • Interviews
    • Opinions
  • Reports
    • Banking/Finance
    • Insurance
    • Budgets
    • GDP
    • Inflation
    • Central Bank
    • Sec/Gse
  • Lifestyle
    • Sports
    • Entertainment
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video
No Result
View All Result
No Result
View All Result
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
No Result
View All Result
Home Business

Special purpose entities shed light on the drivers of foreign direct investment

3 years ago
in Business, Editor's pick, Features, highlights, Home, home-news, latest News, Opinions
3 min read
0 0
0
76
VIEWS
Share on FacebookShare on TwitterShare on Linkedin

Special purpose entities shed light on the drivers of foreign direct investment

Conventional wisdom on capital flows holds that foreign direct investment is for the long-term, while securities and other flows may be more volatile.

However, as Olivier Blanchard and Julien Acalin showed, a large proportion of measured foreign direct investment can be flows going in and out of a country on their way to a final destination. What explains this? The answer is special purpose entities (SPEs).

SPEs are legal entities set up to obtain specific advantages from a host economy, in which they have little to no employment, physical presence, or production. They are usually set up to benefit from low taxes but can be established for other reasons such as easier access to capital markets, financial services, and skilled workforces.

Because they have little to no impact on the economy, these financial flows can distort the true picture of economic activity provided by foreign direct investment numbers. Directly measuring flows from SPEs helps resolve this.

A new IMF database for the first time measures cross-border flows and positions of SPEs resident in 26 participating economies, based upon an international definition.

Read: Government’s fiscal measures not sufficient to address economic challenges – Seth Terkper

RelatedPosts

Gov’t to Overhaul Investment Law, Create 24-Hour Economy Authority in New Bills to Parliament

Ghana, Singapore Push Cross-Border Payments and SME Ties as Mahama Hails Stabilising Economy

GoldBod Suspends Gold Buyer’s Licence Over Illegal Pricing

Using the database our Chart of the Week breaks down foreign direct investment in these economies. Foreign direct investment positions channeled through resident SPEs in some places are remarkably high, in Luxembourg they are 45 times the size of its economy, it’s 30 times in Mauritius, and 28 times in Bermuda.

chart

As outlined in a recent IMF Blog, some of the world’s top recipients of foreign direct investment have large financial stocks that include those channeled through SPEs.

To this end, this new database is a major step toward improving the transparency and comparability of external sector statistics by filling the data gaps, including to better understand the prospective changes due to the new global corporate tax agreement.

The database reflects an internationally-agreed methodology as endorsed by the IMF Committee on Balance of Payments Statistics in a 2018 report. It complements SPE statistics disseminated by the Organisation for Economic Co-operation and Development (OECD) and the European Union statistical office, Eurostat, for their member countries.

This database release will be followed by annual updates featuring increased country coverage, including for EU economies where reporting of SPE data will become mandatory this year.

Source: IMF
Via: norvanreports
Tags: capital marketsEuropean UnionFinancial ServicesIMFOrganisation for Economic Co-operation and Development (OECD)Special purpose entities shed light on the drivers of foreign direct investment
No Result
View All Result

Highlights

JICA and AfDB Sign Agreement to Extend Enhanced Private Sector Assistance Initiative for $5.5 Billion

New Digitized Credit Plans Put Farmers First

International Syndicates Behind Oil Theft in Nigeria

Dangote Ends West Africa’s Fuel Import Dependence, Emerges Region’s Key Diesel, Jet Fuel Supplier

Parliamentary Select Committee on Lands and Natural Resources Visits AGA Iduapriem Mine

Parliamentary Select Committee Lauds Gold Fields’ Contributions During Working Visit

Trending

Business

Gov’t to Overhaul Investment Law, Create 24-Hour Economy Authority in New Bills to Parliament

August 28, 2025

Gov't to Overhaul Investment Law, Create 24-Hour Economy Authority in New Bills to Parliament The John Mahama-led...

Ghana, Singapore Push Cross-Border Payments and SME Ties as Mahama Hails Stabilising Economy

August 28, 2025

GoldBod Suspends Gold Buyer’s Licence Over Illegal Pricing

August 28, 2025

JICA and AfDB Sign Agreement to Extend Enhanced Private Sector Assistance Initiative for $5.5 Billion

August 28, 2025

New Digitized Credit Plans Put Farmers First

August 28, 2025

Who we are?

NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World

NorvanReports is a unique data, business, and financial portal aimed at providing accurate, impartial reporting of business news on Ghana, Africa, and around the world from a truly independent reporting and analysis point of view.

© 2020 Norvanreports – credible news platform.
L: Hse #4 3rd Okle Link, Baatsonaa – Accra-Ghana T:+233-(0)26 451 1013 E: news@norvanreports.com info@norvanreports.com
All rights reserved we display professionalism at all stages of publications

No Result
View All Result
  • Home
  • Business
    • Agribusiness
    • Aviation
    • Energy
    • Insurance
    • Manufacturing
    • Real Estate
    • Maritime
    • Tourism
    • Transport
    • Banking & Finance
    • Trade
    • Markets
  • Economy
  • Reports
  • Technology
    • Cryptocurrency
    • Cyber-security
    • Social Media
    • Tech-guide
    • Telecom
  • Features
    • Interviews
    • Opinions
  • Lifestyle
    • Entertainment
    • Sports
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
NORVANREPORTS.COM | Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.