Ownership and Control of Foreign Direct Investments in Limited Partnerships

Abstract: The financial accounting data about foreign direct investments (FDI), collected, classified, tabulated, and published by the leading statistical institutions of the world, are in part distorted (to the extent that General Partners and Limited Partnerships are involved), and in total contaminated (as distorted data are added to the total pool of data). The erroneous interpretation of the role of voting control, exercised by General Partners in Limited Partnerships, was accepted without critical analysis by the accounting profession, by the economists, and by the world statistical agencies, and is a cause of repeated systemic errors in financial data about FDI, in resulting economic data, in economic research, and in conclusions based on such data. The manuscript suggests ways to correct such widespread systemic methodological errors of interpretation and classification of FDI data and offers ways to improve financial reporting and economic statistics about FDI.