The Blurring of Corporate Investor Nationality and Complex Ownership Structures

24 Pages Posted: 11 Jun 2020

See all articles by Eleonora Alabrese

Eleonora Alabrese

University of Warwick, Students

Bruno Casella

United Nations - Conference on Trade and Development (UNCTAD)

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Date Written: April 30, 2020

Abstract

Recent years have seen a significant increase in the complexity of multinational enterprise (MNE) ownership structures. Complex corporate structures raise concerns about the effectiveness of national and international investment policies, based on the notion of investors’ nationality. This motivates this research effort, aimed at analysing the ownership structures of some 700 000 foreign affiliates (FAs). A new methodology, the bottom-up approach, is introduced. The main objective is to empirically map the “shareholder space” of FAs, along the vertical dimension, from the direct shareholders to the ultimate owners. We find that FAs are often part of transnational investment chains; more than 40 per cent of foreign affiliates have direct and ultimate shareholders in different jurisdictions (“double or multiple passports”). Based on shareholders’ nationality, we then propose and empirically analyse the salient features of four main archetypes of FAs ownership structure: plain foreign, conduit structures, round-tripping and domestic hubs. Each poses specific challenges to policymakers.

Keywords: firm-level, investors’ nationality, multinational enterprises, ownership structures

JEL Classification: F23, G32, H87

Suggested Citation

Alabrese, Eleonora and Casella, Bruno, The Blurring of Corporate Investor Nationality and Complex Ownership Structures (April 30, 2020). Transnational Corporations Journal, Vol. 27, No. 1, 2020, Available at SSRN: https://ssrn.com/abstract=3624118

Eleonora Alabrese (Contact Author)

University of Warwick, Students ( email )

United Kingdom

Bruno Casella

United Nations - Conference on Trade and Development (UNCTAD) ( email )

Palais des Nations
Office E 8074
Geneva, 1211
Switzerland

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