ABSTRACT
The aim of this paper is to present and discuss the scale of foreign direct investment made by state-owned enterprises (SOEs) registered in EU countries in other EU countries in 2017. We created a comprehensive dataset of all intra-EU SOEs’ FDI, on the basis of micro-level data on foreign affiliates, which had hitherto been missing. The role of SOEs’ FDI in the EU economy is relatively low. However, in terms of the home country, we observe a significant asymmetry. Almost 92% of SOE’s foreign affiliates come from the old-EU members. French SOEs are most engaged in FDI activities within EU countries, followed by Germany and Italy. In post-socialist countries, SOEs still play an important role in the economy; however, their activities are concentrated in domestic markets. SOEs are substantial investors in foreign markets in the energy sector. The most attractive countries for investment by state-owned multinational companies are the United Kingdom, Germany and the Netherlands.
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Notes
1. Despite the evolution of MNEs and the rising importance of global value chains, Giroud and Mirza (Citation2015) suggest that rather than a drastic change in the existing categories, only a refinement of FDI motivations is required.
6. The collected data were retrieved in May 2018. Amadeus is a subdatabase of Orbis and collects information on over 20 million companies from Europe (excluding banks).
7. According to the Amadeus classification, there are: very large (Operating Revenue ≥ 100 million EUR or Total assets ≥ 200 million EUR or Employees ≥ 1,000 or listed), large (Operating Revenue ≥ 10 million EUR or Total assets ≥ 20 million EUR or Employees ≥ 150), medium (Operating Revenue ≥ 1 million EUR or Total assets ≥ 2 million EUR or Employees ≥ 15) and small (all others) enterprises.
8. The majority of SOE’s-FAs from non-European countries are owned by: China (918), United Arab Emirates (529), Norway (448) and Russia (304). They are mainly located in the United Kingdom, the Netherlands and Germany. China has its foreign affiliates in 25 out of 28 EU countries (except Bulgaria, Lithuania and Malta). Chinese SOEs are mostly oriented towards the United Kingdom (188), Germany (125) and Ireland (115).
9. UNCTAD and other sources give Germany and Volkswagen as an example. However, in this case, the government owns only 20% of voting shares (and only 12% of shares), which from 2013 have remained a blocking minority stake only with certain decisions, primarily in cases of acquisitions and closing down factories (https://annualreport2017.volkswagenag.com, https://in.reuters.com/article/court-germany-volkswagen/eu-court-germany-has-complied-with-volkswagen-law-ruling-idINB5N0GL01K20131022).