We relied on Bureau Van Dijk’s Orbis Database for MNE- and affiliate-level data. The sample contains the 2000 largest global publicly traded firms as of December 2020. In order to select the 2000 largest firms, we applied the screening criteria in Orbis for: 1) active firms, 2) publicly listed, and 3) with revenues over USD $4.2 billion. These screens resulted in a total of 2000 MNEs from a broad range of industries, headquartered in 63 countries, and with a median total revenue of USD $9.2 billion and median total number of employees of 24,500.
For data on the economic importance of a country to each MNE, we selected the criteria for all entities in the corporate group. The database contained 555,718 entities in the corporate group of the 2000 MNEs, of which 485,293 were active and only 205,267 had recent operational accounts over our sample window. The proportion of Orbis entities with revenue and employee data over our sample window is 45.2 percent and 33.2 percent, respectively.
We collected ownership information from the Orbis Ownership database. The 220,816 entities had over 18.5 million entity-shareholder-year observations. Orbis contains separate identifiers and ownership percentages for the global ultimate owner, shareholders, and immediate direct shareholders. Since some firms are ultimately owned by state governments, private equity groups, or private families that may also own other corporate groups, missing global ultimate identification codes, or alternative company owners due to partial ownership structures (e.g. joint ventures), a major part of the task was cleaning the affiliate ownership data. Where the global ultimate owner identifier matched one of the 2000 MNEs in the data pull, we coded it as owned by that specific MNE. A total of 159,735 entities from 1,531 MNEs had global ultimate owners that matched the MNE identifiers in our sample and 45,532 did not have matching identifiers.
We matched 34,056 more entities using shareholder identification codes matched to MNE identification codes, tracing ownership linkages between group members to capture intermediate entities in the group, and through cross-checking ownership via company filings and reports. The remaining 11,476 we were unable to match or were part of government or private-equity owned groups not part of the focal corporate group.
A total of 119 of the publicly listed MNEs were part of a larger conglomerate group (e.g. Hitachi High Technologies Corporation and Hitachi Construction Machinery Co., Ltd. are publicly listed but also part of Hitachi Ltd.). We rolled these MNEs up into their larger corporate group, resulting in a set of 1,881 consolidated MNEs.
We were unable to match eight MNEs with affiliates. These eight MNEs had no subsidiaries with global ultimate owner, shareholder, or immediate shareholder identification code matches. We confirmed the missing affiliate data through re-searching each of these MNEs’ affiliates in Orbis individually. As a result, 1,873 MNEs compose the final sample of MNEs with economic importance information.
We relied on shareholder ownership percentage information provided by the database to track changes in ownership due to mergers and acquisitions and spin offs. The Orbis Ownership database is updated with information when there is a change in ownership. As a consequence, there are gaps in ownership information between years of updating. For entities with gaps between years of the same owner, we filled in missing ownership data with the most recent prior percentage of ownership reported. For entities that did not have a shareholder ownership percentage, we relied on the global ultimate owner ownership percentage if the global ultimate owner identifier code matched one of the MNE codes. The global ultimate owner ownership percentages are static in the Orbis database, equal to ownership as of 2019. Therefore, we had to check whether the subsidiary entered the corporate group during our sample window for all of these affiliates. When information on subsidiary ownership was not available or provided conflicting information, we validated ownership using information from public filings and reports. In some cases, Orbis provides no ownership percentage, but the affiliates are categorized into independence ratings based on ownership percentage (e.g. B, C, and D ratings). We took the median value of the ownership range for the independence ratings for these firms.