Globalization and the effect on national accounts: practical examples

Abstract

Globalization makes an accurate description of the national economy increasingly difficult. Two parallel processes characterise Dutch firms: on the one hand developing into companies with activities abroad and on the other hand being affiliated to foreign multinational companies. Many of these companies are considered 'complex companies' since their operations have led to major inconsistencies among several source statistics of the National Accounts of Statistics Netherlands. The interpretation of the source statistics related to multinational enterprises is problematic. In National Accounts consistency of data is of prime importance. The System of National Accounts (SNA) and the European System of Accounts (ESA) provide guidelines and definitions to measure the domestic economy and the links between an economy and the rest of the world. However, in many cases SNA and ESA do not offer a solution to the problems created by multinational enterprises. Statistics Netherlands is devising tailor-made solutions to solve these problems.