Methodology of Eco & Finance

8/14/2019 Methodology of Eco & Finance

1/27

Home > International Economic Accounts > Methodology

Methodology

Introduction

The data in this volume cover the operations ofestablishments of U.S. affiliates of foreign companies in1992. A U.S. affiliate is a U.S. business enterprise that isowned 10 percent or more, directly or indirectly, by aforeign person./1/

The volume is divided into two parts. The first covers allindustries and presents data on the number,

employment, payroll, and shipments or sales of theestablishments of U.S. affiliates (hereinafter referred toas "foreign-owned establishments"); it includes data bydetailed industry for nonmanufacturing and totals formanufacturing as a whole. The second part presentsthese data items by detailed industry withinmanufacturing as well as additional items formanufacturing establishments, including value added,total compensation of employees, employee benefits,

hourly wage rates of production workers, andexpenditures for new plant and equipment. In additionto data by industry, both parts present data by Stateand by country of owner./2/

The data for this volume were obtained from the CensusBureau's 1992 Economic Censuses and StandardStatistical Establishment List (SSEL)./3/ They are theresult of a project that links Bureau of Economic Analysis(BEA) enterprise, or company, data on foreign directinvestment in the United States with Bureau of theCensus establishment data for all U.S. businesses./4/The project was authorized by the Foreign DirectInvestment and International Financial DataImprovements Act of 1990.
http://www.bea.gov/http://www.bea.gov/international/index.htmhttp://www.bea.gov/scb/account_articles/international/estab92.htm#fn1#fn1http://www.bea.gov/scb/account_articles/international/estab92.htm#fn2#fn2http://www.bea.gov/scb/account_articles/international/estab92.htm#fn3#fn3http://www.bea.gov/scb/account_articles/international/estab92.htm#fn4#fn4http://www.bea.gov/http://www.bea.gov/international/index.htmhttp://www.bea.gov/scb/account_articles/international/estab92.htm#fn1#fn1http://www.bea.gov/scb/account_articles/international/estab92.htm#fn2#fn2http://www.bea.gov/scb/account_articles/international/estab92.htm#fn3#fn3http://www.bea.gov/scb/account_articles/international/estab92.htm#fn4#fn4


2/27

This volume updates data for foreign-ownedmanufacturing and nonmanufacturing establishmentspublished in Foreign Direct Investment in the United

States: Establishment Data for 1987and data forforeign-owned manufacturing establishments for 198891 published in Foreign Direct Investment in the UnitedStates: Establishment Data for Manufacturing, inseparate volumes for each year (see "Data Availability").

To aid comparisons of the data in this publication withthose in the publications for earlier years, tables Aand Bprovide cross-references between the table numbersused in this publication and those used in thepublications for 198791.

Analyses of the data from the link are available in threeSURVEY OF CURRENT BUSINESS articles: "Foreign DirectInvestment in the United States: Establishment Data for1987," in the October 1992 issue of the SURVEY, givesan overview of the 1987 data and an analysis of theattributes of industries with substantial foreign directinvestment activity; "Characteristics of Foreign-Owned

U.S. Manufacturing Establishments," in the January 1994SURVEY, presents a profile of foreign-ownedmanufacturing establishments using the 1990 data; and"Differences in Foreign-Owned U.S. ManufacturingEstablishments by Country of Owner," in the March 1996SURVEY, uses the 1991 data to examine whetherindustry-mix and operating characteristics of foreign-owned U.S. manufacturing establishments vary bycountry of owner. In addition, an article that will analyze

the 1992 data from a regional perspective is planned.

The establishment data from the link projectcomplement BEA's enterprise data for U.S. affiliates.BEA's enterprise data are needed for analyzing theoverall significance of, and trends in, direct investment
http://www.bea.gov/scb/account_articles/international/estab92/box1.htmhttp://www.bea.gov/scb/account_articles/international/estab92/tableA.htmhttp://www.bea.gov/scb/account_articles/international/estab92/tableB.htmhttp://www.bea.gov/scb/pdf/internat/fdinvest/1994/0194iid.pdfhttp://www.bea.gov/scb/pdf/internat/fdinvest/1994/0194iid.pdfhttp://www.bea.gov/scb/pdf/internat/fdinvest/1996/0396iid.pdfhttp://www.bea.gov/scb/pdf/internat/fdinvest/1996/0396iid.pdfhttp://www.bea.gov/scb/account_articles/international/estab92/box1.htmhttp://www.bea.gov/scb/account_articles/international/estab92/tableA.htmhttp://www.bea.gov/scb/account_articles/international/estab92/tableB.htmhttp://www.bea.gov/scb/pdf/internat/fdinvest/1994/0194iid.pdfhttp://www.bea.gov/scb/pdf/internat/fdinvest/1994/0194iid.pdfhttp://www.bea.gov/scb/pdf/internat/fdinvest/1996/0396iid.pdfhttp://www.bea.gov/scb/pdf/internat/fdinvest/1996/0396iid.pdf


3/27

and for compiling the U.S. international transactionsaccounts, the international investment position of theUnited States, and the U.S. national income and product

accounts. The data on positions and transactionsbetween U.S. affiliates and their foreign parents used incompiling the national and international accounts existonly at the enterprise level. Analyses of some topics,such as profits and taxes, are meaningful only at thatlevel. Furthermore, balance sheets and incomestatements containing the critical, nonduplicativefinancial and operating data needed for examining thesetopics exist only at the enterprise level.

The establishment data facilitate analyses of theactivities and importance of foreign-owned U.S.companies in specific, detailed industries. Eachestablishment of an enterprise can be classifiedseparately in the establishment data, while BEA'senterprise data classify the entire enterprise, howeverdiversified, in one industry. Furthermore, the level ofindustry classification can be much more detailed forindividual establishments than is appropriate forconsolidated enterprises, whose operations may spanmany narrowly defined industries. As a result, foreign-owned establishments can be classified into over 800industries, while BEA's foreign-owned enterprises can beclassified into only 135 industries.

The tables in each part of this volume are organized intothree groups. The first group gives an overview of thedata by industry, country, and State. The second group

presents detailed industry tables for individual States.The third group presents detailed industry tables forselected major investor countries. Some of the tables ineach part show totals for key items of all U.S.establishments and the share of the all-U.S. totalsaccounted for by foreign-owned establishments.


4/27

How the Link Was Done

BEA and the Census Bureau exchanged their data inorder to identify and obtain data for those U.S.establishments on the SSEL that are foreign-owned. TheBEA data used for the link cover U.S. affiliates with totalassets, sales, or net income greater than $1 million;these affiliates account for virtually all of the foreigndirect investment universe in terms of value. The SSEL isa computerized list of all U.S. companies and theirestablishments; it includes names, addresses, and otheridentification information as well as key economic dataobtained from Census Bureau surveys and fromadministrative records.

Foreign-owned establishments on the SSEL wereidentified primarily through a computer match ofEmployer Identification Numbers (EIN's) that are bothreported on BEA's surveys of foreign direct investment inthe United States and included on the Census Bureau'sSSEL. EIN's are identification numbers that companiesand their establishments are required to use when filing

Federal and State payroll and income taxes. Forenterprises that failed to link in the computer match ofEIN's, other enterprise identification information, such asnames and addresses, was used to match the BEAenterprises to Census Bureau establishments. The dataitems that are available on the SSEL in Economic Censusyears are the number of establishments, employment,payroll, and shipments or sales.

To gather the additional data items presented for themanufacturing establishments, the foreign-ownedestablishments were linked to the 1992 Census ofManufactures. Thus, the detailed data items, such asvalue added, capital expenditures, and the cost ofmaterials, come from this link with the Census of


5/27


6/27

of the large BEA affiliates linked to Census Bureauestablishments. Affiliates that failed to link weregenerally small and together accounted for only 142,100

employees. In general, affiliates failed to link to aCensus Bureau establishment because the two agencieshad different EIN's or other identification information fora given company or because of the absence of validEIN's or other identification information.

BEA and Census Bureau Data Compared

In comparing BEA published data on the U.S. affiliates offoreign companies with the data on foreign-owned

establishments in this publication, it should be notedthat the two data sets differ in coverage, definition, andclassification. These differences do not significantlyaffect comparisons of overall totals but may affectcomparisons for specific industries. This sectionsummarizes the key differences.

Coverage differences

The industry coverage of the Census Bureau'sestablishment data is somewhat narrower than that ofBEA's enterprise data. The Census Bureau's SSEL datado not cover agricultural production of crops andlivestock (SIC 01 and 02) and railroad transportation(SIC 40), whereas these industries are covered in theBEA data./6/ The BEA data indicate that employment ofaffiliates in these industries was relatively small in 19922,700 for affiliates in agricultural production of crops

and livestock and 18,000 for affiliates in railroadtransportation.

The geographic coverage of the Census Bureau's data forforeign-owned establishments is somewhat narrowerthan that of BEA's enterprise data. The former cover the50 States and the District of Columbia. The latter also
http://www.bea.gov/scb/account_articles/international/estab92.htm#fn6#fn6http://www.bea.gov/scb/account_articles/international/estab92.htm#fn6#fn6


7/27

cover Puerto Rico, the Virgin Islands, Guam, AmericanSamoa, and other outlying U.S. areas. In the BEA data,employment in the latter areas was 34,500 in 1992.

Definitional differences

BEA data are reported on a fiscal year basis, whereasthe Census Bureau data are generally on a calendar yearbasis./7/ As a result, for some industries, BEA totals forcertain items, such as compensation of employees, candiffer from the totals for similar items based on theCensus Bureau data for foreign-owned establishments.

In cases where similar items are available from bothagencies, the BEA definitions sometimes differ fromthose used by the Census Bureau. These differences arenoted in the "Definitions" section.

Classification differences

As noted earlier, most BEA data for U.S. affiliates areclassified by primary industry of the consolidatedenterprise, whereas the Census Bureau data are

classified by the primary industry of each individualestablishment within the enterprise. Affiliates are oftenhighly diversified, and many of them are likely to haveactivities in industries other than the one that applies tothe consolidated enterprise as a whole. As a result,totals for industries in the BEA data often differsignificantly from totals for the same industries in theCensus Bureau data.

Country and Industry Classification

In tables that show data by country, the data areclassified by country of ultimate beneficial owner (UBO)of the U.S. affiliate to which the establishment belongs.A UBO is that person that ultimately owns or controls,and therefore ultimately derives the benefits from
http://www.bea.gov/scb/account_articles/international/estab92.htm#fn7#fn7http://www.bea.gov/scb/account_articles/international/estab92.htm#defns#defnshttp://www.bea.gov/scb/account_articles/international/estab92.htm#fn7#fn7http://www.bea.gov/scb/account_articles/international/estab92.htm#defns#defns


8/27

owning or controlling, a U.S. affiliate. More specifically,the UBO is that person, proceeding up a U.S. affiliate'sownership chain, beginning with and including the

foreign parent, that is not owned more than 50 percentby another person. The foreign parent is the first personoutside the United States in a U.S. affiliate's ownershipchain that has a direct investment interest in the U.S.affiliate. (See "General Notes to Tables" for additionaldetails.)

How an establishment is classified by industry dependson whether the establishment is an operating or anadministrative and auxiliary establishment.

Operating establishments produce goods and servicesfor sale or produce goods for use by otherestablishments of the same enterprise and are classifiedbased on their primary activity. This activity is generallydetermined by the principal product or group of productsproduced or distributed or by the services rendered bythe establishment. In mining and manufacturing,establishments are classified based on the products

produced: These establishments are usually classified inthe industry for which the value of shipments ofproducts primary to that industry is largest. Inconstruction, establishments are classified based onmajor activity, as measured by the dollar value ofbusiness done. In transportation and services,establishments are classified on the basis of either theirself-designation or information on receipts by type ofservice provided. In wholesale and retail trade,

establishments are classified on the basis of thecommodity or commodity group that is the primarysource of their receipts. In finance, insurance and realestate, establishments are classified on the basis of theirself-designation, sources of revenue, or special inquiries.
http://www.bea.gov/scb/account_articles/international/estab92/notes.htmhttp://www.bea.gov/scb/account_articles/international/estab92/notes.htm


9/27

Administrative and auxiliary establishments providesupport services to the operating establishments of firmsand are classified based on the industry classification of

the operating establishments they serve. Because theadministrative and auxiliary units of large companiestypically serve establishments in more than one industry,they generally are not classified at the detailed industrylevel but rather are presented under a single, separateentry within each industry division./8/ Exceptions aremining; transportation and public utilities; and finance,insurance, and real estate. In mining, as is the case inthe Census of Mineral Industries, administrative and

auxiliary establishments are included in the principalfour-digit industry served. In transportation and publicutilities, as is the case in the Census of Transportation,Communication, and Utilities, administrative andauxiliary establishments of firms classified in pipelines,except natural gas (SIC 46), telephone, telegraph, andother message communications (SIC 481 and 482), andelectric and gas services (SIC 491, 492, and 493) areincluded in the principal industry served; the

administrative and auxiliary establishments of firmsclassified in the other industries within this division areincluded in the administrative and auxiliary entry for thedivision. In finance, insurance, and real estate, as is thecase in the Census of Financial, Insurance, and RealEstate Industries, administrative and auxiliaryestablishments of firms classified as commercial banks,savings institutions, and credit unions (SIC's 602, 603,and 606) or as life insurance carriers, accident and

health and medical service plans, fire, marine, andcasualty, and surety insurance carriers (SIC's 631, 632,633, and 635) are included in the principal industryserved; the administrative and auxiliary establishmentsof firms classified in the other industries within thisdivision are included in the administrative and auxiliary


10/27

entry for the division.

Comparability with Data for 198791

In general, the 1992 data for foreign-ownedestablishments are comparable with the 198791 datapublished earlier. In some industries, the sources of the1992 data differ from those for earlier years, but thedifferences do not materially affect the comparability ofthe data. One difference results because finance,insurance, real estate, communications, utilities, andcertain transportation industries were covered for thefirst time in the 1992 Economic Censuses. The 1992

data were obtained from these censuses, whereas the1987 data were obtained from the SSEL. An additionaldifference is that, for manufacturing, the 1992 data wereobtained from the Census of Manufactures, whereas the198891 data were obtained from the Annual Survey ofManufactures./9/

Definitions

The definitions used in this publication are the same asthose used in the 1992 Economic Censuses. Thedefinitions are summarized below; in some cases, moredetailed definitions may be found in the 1992 EconomicCensus publications. Most of the definitions are for itemspresented only for establishments in manufacturing. Thefour exceptions are the definitions for employees,establishments, payroll, and value of shipments or sales,which apply to items available for establishments in all

industries. Where significant differences exist, thedefinitions used here are compared with the definitionsused for the corresponding items in the BEA data.

Benefits

Data on benefits are presented for manufacturing


11/27

establishments. Benefits, together with payroll, composecompensation of employees. Benefits consist of "socialsecurity and other legally required payments" and

"employer payments and other programs."

Social security and other legally requiredpayments.These payments consist of all legallyrequired employee benefits, primarily Federal old ageand survivors' insurance (social security), unemploymentcompensation, and workers' compensation.

Employer payments and other programs.Thesebenefits consist of employer payments for voluntary

employee benefit programs not specifically required bylegislation, whether they are employer-initiated or theresult of collective bargaining. They include employerpayments for life insurance premiums, supplementalaccident and sickness insurance premiums, pensionplans, supplemental unemployment compensation,welfare plans, stock purchase plans on which theemployer payment is not subject to withholding tax, anddeferred profit-sharing plans. They exclude employer

costs for company-operated cafeterias, in-plant medicalservices, free parking, discounts on employee purchases,and uniforms and work clothing for employees.

Cost of materials

Data on cost of materials are presented formanufacturing establishments. Cost of materials consistsof direct charges actually paid or payable for items

consumed or put into production during the year,including freight charges and other direct chargesincurred by the establishment in acquiring thesematerials. It includes the cost of materials or fuelconsumed, whether purchased by the individualestablishment from other companies, transferred to itfrom other establishments of the same company, or


12/27

withdrawn from inventory during the year. The majorcomponents of cost of materials are the following: (1)Raw materials, semifinished goods, parts, containers,

scrap, and supplies put into production or used asoperating supplies or for repair and maintenance duringthe year; (2) electric energy purchased; (3) fuelsconsumed for heat, power, or generation of electricity;(4) work done by others on materials or parts furnishedby manufacturing establishments (contract work); and(5) products bought and resold in the same condition.Cost of materials excludes purchased services. Likevalue of shipments, totals for cost of materials for major

industry groups and for manufacturing as a wholeinclude large amounts of duplication. (See definition ofvalue of shipments.)

Cost of purchased fuels and electric energy

Data on cost of purchased fuels and electric energy arepresented for manufacturing establishments. Cost ofpurchased fuels and electric energy consists of the costof fuels consumed for heat, power, or generation of

electricity whether purchased from the establishments ofother companies, transferred from other establishmentsof the same company, or withdrawn from inventoryduring the year, and the cost of purchased electricenergy. The cost and quantity of purchased electricenergy represent the amounts actually used during theyear.

Employees

In all industries except construction, mining, andmanufacturing, the number of employees is the numberof full-time and part-time employees who were on thepayroll in the pay period including March 12.

For construction, the number of employees is the
http://www.bea.gov/scb/account_articles/international/estab92.htm#vos#voshttp://www.bea.gov/scb/account_articles/international/estab92.htm#vos#vos


13/27

average number of full-time and part-time employees onthe payroll for the four pay periods including the 12th ofMarch, May, August, and November. For mining and

manufacturing, the number of employees is the averagenumber of all full-time and part-time production workerson the payroll for the four pay periods including the 12thof March, May, August, and November, plus the numberof other full-time and part-time employees on the payrollfor the pay period including March 12.

Employees include salaried officers and executives ofcorporations; they exclude proprietors and partners ofunincorporated businesses.

The number of employees for foreign-ownedestablishments differs somewhat from that for U.S.affiliates in the BEA enterprise data because ofdifferences in the date at which employment ismeasured. In the enterprise data, the number ofemployees is the number of full-time and part-timeemployees who were on the payroll at the end of theenterprise's fiscal year./10/

Establishment

An establishment is a single physical location wherebusiness is conducted or where services or industrialoperations are performed. The data cover everyestablishment having one or more paid employeessometime during 1992. The number of establishments isthe number that were in business at any time during

1992 (regardless of their status at the beginning or endof the year).

An establishment may be either an operatingestablishment or an administrative or auxiliaryestablishment. Operating establishments produce goodsand services for shipment or sale to others.


14/27

Administrative and auxiliary establishments are centraladministrative offices and auxiliary units of companieswith more than one establishment. A central

administrative office is an establishment primarilyengaged in management and general administrativefunctions performed centrally for other establishments inthe same company. An auxiliary unit is an establishmentprimarily engaged in performing support services forother establishments in the same company rather thanfor the general public or for other business firms. Suchsupport services include research, development, andtesting; warehousing and storage; maintenance and

repair; and other miscellaneous services.Expenditures for new plant and equipment

Data on expenditures for new plant and equipment arepresented for manufacturing establishments.Expenditures for new plant and equipment consist ofexpenditures for (1) plants under construction, (2)permanent additions and major alterations to operatingmanufacturing establishments, and (3) new machinery

and equipment used for replacement and for additions toplant capacity, if they were of the type for whichdepreciation accounts were ordinarily maintained. Theyinclude expenditures for assets acquired under capitalleases. They exclude expenditures for facilities owned bythe Federal Government but operated under contract byprivate companies and plant and equipment furnished atno cost to the manufacturer by communities andnonprofit organizations.

Gross book value of depreciable assets

Data on gross book value of depreciable assets arepresented for manufacturing establishments. The grossbook value of depreciable assets is the original-costvalue of fixed assets (structures and machinery and


15/27

equipment) in place at the end of the year. The valuesshown represent the actual cost of assets at the timethey were acquired including all costs incurred in making

the assets usable (such as transportation andinstallation). Included are all buildings, structures,machinery, and equipment (production, office, andtransportation equipment) for which depreciationreserves are maintained. Excluded are nondepreciablecapital assets, including inventories and intangibleassets, such as timber and mineral rights.

Other workers

Data on other workers are presented for manufacturingestablishments. Other workers are nonproductionemployees of the establishment, including thoseengaged in factory supervision above the line-supervisorlevel. Other workers include employees in the followingactivities: Sales (including drivers/salespersons), salesdelivery (highway truck drivers and their helpers),advertising, credit, collection, installation and servicing,clerical and routine office functions, executive,

purchasing, financial, legal, personnel (includingcafeteria, medical, etc.), professional, and technical. Allemployees at administrative and auxiliaryestablishments are included. Also included areemployees engaged in the construction of majoradditions or alterations to the plant and utilized as aseparate work force. (See definition ofproductionworkers.)

Payroll

Payroll and benefits compose compensation ofemployees. Payroll consists of the gross earnings, paid inthe calendar year, of all employees on the payroll of theestablishment. It includes salaries, wages, commissions,dismissal pay, bonuses, vacation and sick leave pay, and
http://www.bea.gov/scb/account_articles/international/estab92.htm#pw#pwhttp://www.bea.gov/scb/account_articles/international/estab92.htm#pw#pwhttp://www.bea.gov/scb/account_articles/international/estab92.htm#pw#pwhttp://www.bea.gov/scb/account_articles/international/estab92.htm#pw#pw


16/27

compensation in kind, prior to such deductions asemployees' social security contributions, withholdingtaxes, group insurance, union dues, and savings bonds.

Salaries of officers and executives of corporations areincluded. Payments to proprietors and partners ofunincorporated concerns, to members of the armedforces, and to pensioners carried on the active payrollsof establishments are excluded.

Payroll as shown for foreign-owned establishments isdefinitionally equivalent to "wages and salaries" asshown for U.S. affiliates in the BEA enterprise data.Totals for the two measures may differ because, amongother things, the Census Bureau payroll data aremeasured on a calendar year basis, whereas the BEAwages and salaries data are measured on a fiscal yearbasis./11/

Production worker hours

Data on production worker hours are presented formanufacturing establishments. Production worker hours

consist of hours worked, including actual overtime hours(not straight-time-equivalent hours). They exclude hourspaid for vacations, holidays, or sick leave.

Production workers

Data on production workers are presented formanufacturing establishments. Production workers areworkers engaged in manual work and productionoperations or performing functions closely associated

with production operations. They are workers up throughthe line-supervisor level at an operating establishmentwho are engaged in fabricating, processing, assembling,inspecting, receiving, storing, handling, packing,warehousing, shipping (but not delivering),maintenance, repair, janitorial and guard services,


17/27

product development, auxiliary production for plant'sown use (power plant, etc.), recordkeeping, and otherservices closely associated with these production

operations at the establishment. (See definition ofotherworkers.)

Shipments or sales

Data on shipments or sales are presented for operatingestablishments for all industries covered by the 1992Economic Censuses, but such data are not available forthe agricultural services, forestry, and fishing industries,which are not covered by the censuses.

The definition of shipments or sales varies by industry:

For mining, the item shown is the value of "shipmentsand receipts." Shipments include all products physicallyshipped from the establishment. Receipts includecontract work done for others, except custom milling,and the value of products bought and sold withoutfurther processing.

For construction, the item shown is the "value ofconstruction work." Construction work consists of thevalue of all work performed by general contractors,special trades contractors, and subcontractors and ofland development and improvement work.

For manufacturing, the item shown is the value of"shipments." Shipments covers the net selling values,f.o.b. plant (exclusive of freight and taxes), of all

products shipped as well as miscellaneous receipts.

Totals for value of shipments for major industry groupswithin manufacturing and for manufacturing as a wholeinclude large amounts of duplication because theproducts of some industries are used as materials by
http://www.bea.gov/scb/account_articles/international/estab92.htm#ow#owhttp://www.bea.gov/scb/account_articles/international/estab92.htm#ow#owhttp://www.bea.gov/scb/account_articles/international/estab92.htm#ow#owhttp://www.bea.gov/scb/account_articles/international/estab92.htm#ow#ow


18/27

others. This duplication results, in part, from thecombination of related industries that representsuccessive stages in the production of a finished

manufactured product. Examples are the combination offlour mills and bakeries in the food group and of pulpmills and paper mills in the paper and allied productsgroup.

For wholesale or retail trade, the item shown is "sales."Sales includes sales of merchandise plus receipts fordelivery, installation, maintenance, repair, alteration,storage, equipment rental, and other services.

For transportation and public utilities, the item shown is"operating revenue." Operating revenue includes grossrevenue from customers or clients for services rendered,from the use of facilities and from merchandise sold.

For finance, insurance, and real estate, the item shownis "revenue." Revenue includes net premiums earned byinsurance carriers, commissions and fees from allsources, rents, net investment income, interest,

dividends, service contracts, royalties, and dues andassessments from members.

For services, the item shown is "receipts." Receiptsincludes receipts for services rendered, for the leasing offacilities and equipment, and for the sale of merchandiseby service establishments. It also includes the totalvalue of service contracts, amounts received for worksubcontracted to others, and dues and assessments

from members and affiliates.

The shipments or sales measure shown here for foreign-owned establishments differs significantly in conceptfrom the "sales" measure in the BEA enterprise data forU.S. affiliates. Because the shipments or sales datashown here are based on data reported at the


19/27

establishment level, they include the value of shipmentsor sales between establishments within the sameenterprise, as well as the shipments or sales of the

establishment to outsiders. The BEA sales measure doesnot include shipments or sales between establishmentswithin an enterprise, because the BEA data are reportedon a consolidated enterprise basis, and, on this basis,only sales by the consolidated enterprise to outsideindividuals or firms are counted. As a result of thisdifference, the shipments or sales total for an enterpriseobtained by summing across all establishments of theenterprise based on the Census Bureau data could be

significantly higher than the sales total for the sameenterprise based on the BEA data. Another difference isthat, like payroll data, the Census Bureau measure is ona calendar year basis while the BEA measure is on afiscal year basis.

Value added by manufacture

Value added by manufacture is derived by subtractingthe cost of materials (including materials, supplies,

containers, fuel, purchased electricity, and cost ofcontract work) from the value of shipments (productsmanufactured plus receipts for services rendered). Theresult of this calculation is adjusted by the addition ofvalue added by merchandising operations (the differencebetween the sales value and the cost of merchandisesold without further manufacture, processing, orassembly) plus the net change between beginning- andend-of-year finished goods and work-in-process

inventories.

Value added by manufacture avoids the duplication inthe value of shipments that results when the products ofone establishment are used as materials by another.Value added by manufacture is considered the best valuemeasure available for assessing the relative economic


20/27

importance of manufacturing among industries andgeographic areas.

Although value added by manufacture and BEA'senterprise measure of gross product are similarmeasures, they differ in definition and in method ofcomputation. BEA's gross product measure is calculatedas the sum of (1) factor incomes (that is, compensationof employees, profits, and interest), (2) nonfactorincome (that is, indirect business taxes), and (3)consumption of fixed capital (that is, depreciation).Value added by manufacture, on the other hand, iscalculated as the difference between the value of output(value of shipments plus the change in finished goodsand work-in-process inventories) and the cost ofmaterials consumed. The two measures differ becausepurchased services are excluded from gross product butare included in value added by manufacture and becausesales, excise, and other indirect taxes are included ingross product but are excluded from value added bymanufacture. Additionally, gross product reflectsinventory change valued at replacement cost, whereasvalue added by manufacture reflects inventory changevalued at book value.

Confidentiality

The Census Bureau and BEA are prohibited by law frompublishing data that disclose the identity of, orinformation reported by, individual companies. In thispublication, data in each cell were tested to determine

whether they should be suppressed to maintainconfidentiality. The data on numbers of establishmentsand their distribution by employment size class are notconsidered confidential, and these items are shown forcountries, industries, or States in instances where otheritems are suppressed. For employment of foreign-owned


21/27

establishments, cells that are suppressed contain lettersymbols indicating the employment size range for thecell. For all other items, suppressed cells are indicated

by a "(D)"; no size ranges are given.

The data in this publication are presented at a highlydetailed industry level. In tables that present cross-classifications of the detailed industry data, such as byindividual State or by investing country, many cells atthe greatest levels of detail are suppressed. The largenumber of suppressed cells in this volume is anunavoidable consequence of distributing data for arelatively small number of companies among a largenumber of highly detailed categories while upholding thelegal requirement to preserve the confidentiality of thedata of individual companies.

Appendix: Data Tabulation

Treatment of Administrative and AuxiliaryEstablishments

Data for administrative and auxiliary establishments areavailable only for number of establishments, number ofemployees, and payroll. For these three items, the totalsshown in this publication for industry divisions for bothforeign-owned establishments and all U.S.establishments cover both administrative and auxiliaryestablishments and operating establishments./12/ For allU.S. establishments, this treatment differs from that insome 1992 Economic Census publications. In particular,

division totals in the Economic Census publications forconstruction, wholesale trade, retail trade, and servicesexclude data for administrative and auxiliaryestablishments, and those for transportation and publicutilities and for finance, insurance, and real estateexclude data for the administrative and auxiliaryestablishments of firms classified in certain industries


22/27

within the divisions./13/

For items other than number of establishments, numberof employees, and payroll, totals shown for industrydivisions for both foreign-owned and all U.S.establishments cover operating establishments only.

Relation of Detail to Totals

For both foreign-owned and all U.S. establishments, the"all industries" totals shown in the tables do not equalthe sum of the data for the individual industry divisions,because the "land subdividers and developers, except

cemeteries" industry (SIC 6552) is included in both theconstruction and the finance, insurance, and real estatedivisions but is included only once in the "all industries"totals. Land subdividers and developers are included inboth divisions so that, for each division, the totals shownare consistent with the totals for all U.S. businesses inthe Census of Construction Industries and the Census ofFinancial, Insurance and Real Estate Industries. TheCensus of Construction Industries includes "land

subdividers and developers, except cemeteries" inconstruction, while the Census of Financial Insuranceand Real Estate Industries includes it in finance,insurance, and real estate.

Subtotals for industry divisions and for two- and three-digit industries may not equal the sum across the moredetailed industry data included in these subtotals. Onereason is that the industry classifications of some

establishments included on the SSEL are not known atthe four-digit industry level. This happens when theCensus Bureau receives reports for new establishmentsbut does not receive the information needed to classifythem at the detailed industry level. In such cases, datafor the establishments may be included in the division ortwo- or three-digit industry subtotals but may not be


23/27

included in the more detailed data below thosesubtotals.

In tables for individual States, industry subtotals maynot equal the sum across the more detailed industriesshown below those subtotals because some industriesmay not be shown. The industries not shown are thosenot shown in the 1992 Economic Censuses and CountyBusiness Patterns publications because employment inthem is small. Also, in tables A2.1, M2.1, A3.15A3.21,and M3.15M3.21, industries in which foreign-ownedestablishments have fewer than 100 employees are notshown. Similarly, in tables A3.1A3.7, industries inwhich foreign-owned establishments have fewer than1,000 employees are not shown, and in tables M3.1M3.6, industries in which foreign-owned establishmentshave fewer than 2,500 employees are not shown. Datafor an unpublished industry are nevertheless included inthe total shown for the broader industry group of whichit is a part.

Because some industries may not be shown for

individual States, the sum of the data across States forthose industries may not equal the industry totals shownin tables that present data for the nation as a whole.

Footnotes:

1. "Person" is broadly defined to include anyindividual, corporation, branch, partnership,associated group, association, estate, trust, or

other organization and any government (includingany corporation, institution, or other entity orinstrumentality of a government). The data are notadjusted for percentage of foreign ownership. Thus,for example, the employment data shown hereinclude all employees at the establishments of eachU.S. affiliate, even though the foreign investor may


24/27

own as little as 10 percent of the affiliate. However,most affiliates are majority owned; according toBureau of Economic Analysis data, U.S. affiliatesthat are majority owned (that is, affiliates that are

owned more than 50 percent by foreign directinvestors) accounted for 83 percent of allemployment by U.S. affiliates in 1992.

2. The data are also available on diskette. In additionto the tables in this volume, the diskette includestables with more detailed State-by-industry datathan are shown here. See "Data Availability."

3. The Census Bureau's 1992 Economic Censuses

include the Census of Mineral Industries, Census ofConstruction Industries, Census of Manufactures,Census of Transportation, Communication, andUtilities, Census of Retail Trade, Census ofWholesale Trade, Census of Financial, Insurance,and Real Estate Industries, and Census of ServiceIndustries. Data for foreign-owned establishmentsin the following industries are from the SSEL:Agriculture services, forestry, and fishing; a few

industries in transportation and public utilities;trusts in finance, insurance, and real estate; andprivate education and noncommercial.

Data for all U.S. establishments with which the datafor foreign-owned establishments are compared areeither from the Economic Censuses or from theCensus Bureau's County Business Patternspublications, which are compilations of data from

the SSEL. Data from the economic censuses arepublished in a number of reports. For thispublication, the 1992 Economic Censuses data forall U.S. establishments are from the 1992 EconomicCensus CD-ROM, and the scope of the foreign-owned establishment data is consistent with the1992 Economic Censuses geographic area series
http://www.bea.gov/scb/account_articles/international/estab92/box1.htmhttp://www.bea.gov/scb/account_articles/international/estab92/box1.htm


25/27

reports on CD-ROM.

4. An establishment is a single physical location wherebusiness is conducted or where services orindustrial operations are performed. See the

"Definitions" section.

5. More specifically, the data cover any foreign-ownedestablishment that had one or more paid employeessometime during 1992.

6. In general, the Census Bureau's SSEL data coverestablishments with employees subject to theFederal Insurance Contributions Act (FICA). Datafor establishments with employees that are exempt

from FICA, such as those in agricultural productionof crops and livestock and railroad transportation,are excluded.

7. In BEA's surveys, a U.S. affiliate's fiscal year is thefinancial reporting year for the affiliate that endedin that calendar year. In BEA's 1992 benchmarksurvey of foreign direct investment in the UnitedStates, affiliates with fiscal years ending in the last

quarter of the calendar year accounted for almostthree-fourths of total U.S. affiliate employment. SeeForeign Direct Investment in the United States:1992 Benchmark Survey, Final Results.

8. In the 1992 Economic Census, such establishmentsare called "auxiliaries."

9. The sources for the all-U.S. establishment data towhich the data for foreign-owned establishments

are compared also differed between 1992 and theearlier years. In the industries covered for the firsttime by the Economic Censuses, the 1992 datawere taken from the censuses, whereas the 1987data were taken from County Business Patterns.Additionally, the 1992 data for manufacturing wereobtained from the Census of Manufactures, whereas
http://www.bea.gov/scb/account_articles/international/estab92.htm#defns#defnshttp://www.bea.gov/scb/account_articles/international/fdius92.htmhttp://www.bea.gov/scb/account_articles/international/fdius92.htmhttp://www.bea.gov/scb/account_articles/international/estab92.htm#defns#defnshttp://www.bea.gov/scb/account_articles/international/fdius92.htmhttp://www.bea.gov/scb/account_articles/international/fdius92.htm


26/27

the 198891 data were from the Annual Survey ofManufactures. For a discussion of how data for allU.S. establishments from these sources differ, seethe publications that present the data; in particular,

for an analysis of how the data from the 1992Census of Manufactures compare with the sample-based 198891 data from the Annual Survey ofManufactures, see the Annual Survey ofManufactures publication that presents data for1994.

10.In the enterprise data, a U.S. affiliate's 1992 fiscalyear was defined to be the affiliate's financialreporting year that ended in calendar year 1992. If

an affiliate's end-of-year employment was unusuallyhigh or low because of temporary factors, a numberreflecting normal operations was obtained.

11. See footnote 7.

12.As noted in the Country and Industry Classificationsection, in most industry divisions, data foradministrative and auxiliary establishments are notclassified into detailed industries but are instead

shown as a separate entry on an "administrativeand auxiliary" line for the division.

13.For this publication, data on all-U.S. administrativeand auxiliary establishments in these industrieswere obtained from the Enterprise Statistics reporton the 1992 Economic Censuses CD-ROM, whichprovides information on establishments notavailable in the Economic Census publications for

the individual industry divisions.

Last updated: Thursday, January 22, 2009 Home

|

Contact Us

|
http://www.bea.gov/scb/account_articles/international/estab92.htm#fn7#fn7http://www.bea.gov/index.htmhttp://www.bea.gov/contacts/search.htmhttp://www.bea.gov/scb/account_articles/international/estab92.htm#fn7#fn7http://www.bea.gov/index.htmhttp://www.bea.gov/contacts/search.htm


27/27

Policies

| Accessibility

|

ESR System |

RSS

|

Information Quality Guidelines

| Data Dissemination Practices

|

Privacy Policy

| USA.gov

Bureau of Economic Analysis is an agency of the U.S.Department of Commerce.
http://www.bea.gov/about/policies.htmhttp://www.bea.gov/about/accessibility.htmhttp://www.bea.gov/status/index.cfmhttp://www.bea.gov/rss/rss.xmlhttp://www.bea.gov/about/infoqual.htmhttp://www.bea.gov/about/BEAdissemination.htmhttp://www.bea.gov/about/Privacy_Statement.htmhttp://www.usa.gov/http://www.doc.gov/http://www.doc.gov/http://www.bea.gov/about/policies.htmhttp://www.bea.gov/about/accessibility.htmhttp://www.bea.gov/status/index.cfmhttp://www.bea.gov/rss/rss.xmlhttp://www.bea.gov/about/infoqual.htmhttp://www.bea.gov/about/BEAdissemination.htmhttp://www.bea.gov/about/Privacy_Statement.htmhttp://www.usa.gov/http://www.doc.gov/http://www.doc.gov/

Documents

Methodology of Eco & Finance