Towards time-consistent bilateral FDI statistics: A new dataset covering 2001-2022

During the 2008-2010 financial crisis, OECD and IMF changed the definition of foreign direct investment (FDI) to get better information on intra-company financing activity. The new definition gives financing activities by subsidiary affiliates of multinational companies the same status as equity-based managerial control of foreign firms. It resulted in a systematic drop of quality, informative content and consistency of FDI statistics, as is frequently signalled in the literature. We propose a new formal framework for achieving time-consistent FDI data. It emulates the FDI definition of before 2013 that was based primarily on FDI assets. We develop a formal framework for this method and provide a full proof-of-concept. We constructed a new long-term dataset, called UIFS4. The database is a balanced panel covering bilateral FDI between 232 jurisdictions over the period 2001-2022. The dataset is solely based on reported data and uses no estimation or imputation. The performance of UIFS4 is evaluated quantitatively in a comparison with the original source data.