5. Undertaking a Direct Investment Survey
- Rita Mesias
- Published Date:
- October 2015
In undertaking an enterprise survey, it is important to develop a timetable. This chapter may be especially helpful to compilers that intend to conduct a direct investment survey for the first time.
5.1 The timetable serves two main purposes: (1) tasks are identified, and (2) their sequencing is established to meet the objectives of the survey.
5.2 In the CDIS, the economies conducting a direct investment position survey for the first time will have a different timetable from those economies that conduct them regularly. Box 5.1 sets out a broad framework for a timetable, which can be adapted to national circumstances.
Responsibility for Producing Direct Investment Statistics
5.3 In many economies, a statistics act or formal arrangements exist under which the central bank or statistical agency has the authority to collect information required for participation in the CDIS.1 In some economies, responsibility for collecting data on direct investment may be split between two or more agencies. For example, central banks may have responsibility for obtaining data from financial institutions, while the national statistical agency may have responsibility for the nonfinancial entities. In other economies, the role of the investment approval agency may be very important. Involving all the relevant agencies will improve the overall coverage and accuracy of the data eventually collected. Any survey questionnaire should make clear which agency(ies) have access to the reported data, and who has the main responsibility for the compilation and dissemination of this information.
Creation/Update of a Survey Frame
5.4 The survey frame comprises the set of units subject to the direct investment survey and the details about those units that can facilitate the survey. The survey frame is among the most important determinants of the coverage of the survey and hence of the measurement of direct investment. The survey frame can be used to list direct investment units as well as to facilitate some of the steps involved in conducting the survey, notably through storing and tracking information on the units being surveyed.
Information Content of the Survey Frame
5.5 The survey frame should be developed no later than 12 months (preferably 18 months) prior to the launch of the first survey (and updated periodically). The survey frame should include relevant information on each respondent, and may serve as a tracking system for contacts with respondents.
Computerizing the Survey Frame
5.6 Computerizing the survey frame may save compilers time and effort and reduce the scope for error in dealing with survey respondents. Careful maintenance of the database is also required; (e.g., updating address changes, company name changes, etc.). The type of issues and tasks that national compilers need to consider include those given in Box 5.3.
Box 5.1Timetable for Conducting a Direct Investment Survey
* Reference Date (December 31, 20xx) = RD
Box 5.2Respondent Information
Information Relating to Respondents
- ID code/Registry or Business Number
- Respondent’s address
- Contact person/authorized person to sign form
- Designation of contact person/authorized person
- Phone number of contact person/authorized person
- Facsimile number and e-mail address of contact person/authorized person
- Activity code of respondent (i.e., business sector of respondent)
- Institutional sector of the respondent
- Investment code (is respondent involved in inward or outward direct investment?)
- Financial/fiscal year (i.e., accounting period)
- Well-integrated data collection provides comprehensive response logs containing information about the respondent and to track response status.
Response log details
- Date letters/questionnaires are sent (could be automatically entered by computer)
- Date due
- Response status (responded, liquidated, no response, respondent owned by another business that will respond)
- Date first response received
- Date of first and second follow-up
- Edit date–case edited
Box 5.3Issues and Tasks for Computerizing the Survey Form
- Taking account of the information flows to and from the database (the use of charts and diagrams may be useful in the planning phase)
- Taking account of the specifications required to query the frame and to generate reports
- Devising a coding structure that embodies important defining characteristics of each respondent. This allows the sorting and analysis of respondents and the tracking of nonresponse
- Ensuring that supporting hardware/software is sufficient for the task, for instance, that the memory and processing capabilities are such that response and retrieval times are acceptable
- Allowing time for a thorough tryout of the system before “live” use
- Backing up copies of data and software on a regular basis and storing them both on-site and at a remote location so that the files can be restored in the event of a system breakdown
- Ensuring appropriate systems security and access authorization
- Producing thorough documentation on the system
- Providing for a suitable filing system for associated papers, not least the completed survey forms
Use of the Survey Frame
5.7 Once the national survey is underway, the benefits of an efficient computerized survey frame become apparent.2 The benefits accrue both at the initial stage of the mail out of the survey forms and at the follow-up stage and beyond. Some of these benefits are presented as follows to provide national compilers with an idea of the capabilities of a computerized information database.
5.8 Dispatching survey forms. At the initial stage, compilers need to dispatch3 the survey forms and companion transmittal letters. To do so, they can generate the mailing labels from the computerized information database. At the same time, a record can be written noting which survey respondents will be sent a questionnaire (e.g., mail status to “yes”). Compilers can also perform a quality check to ensure that the right respondent is receiving the right survey form(s).
5.9 Acknowledging receipt. This is particularly important if the mailing includes more than one type of survey form. If the statistical office has never previously conducted a direct investment survey, it may be useful to include with the survey form a postcard (or use some similar technique) that respondents use to acknowledge receipt of the questionnaire and identify the person to contact. In this way, compilers can quickly identify problems and initiate follow-up action. The national compiler should note, in the response log, those entities that have returned the postcard. National compilers should record the return of the completed survey form in the response log, along with the date of receipt; any changes required to the information database, for instance, name, address, etc., could be made. Compilers could run a report to verify that the correct entries have been made. Thereafter, they could distribute survey forms to the appropriate person for data capture and editing.
5.10 Contacting the compilers. For a number of reasons, respondents may wish to contact the compiler using the contact information printed on the questionnaires. The compiler should keep a record of significant phone calls and/or correspondence (such as requests for extension of the survey due date) either in a manual file or as a note against the appropriate record in the response log file, along with a notation on how the matter was resolved. If a survey respondent requires more time to complete the survey form, the compiler should note this information so that reminders are not sent. In such a case, the response log status is changed to indicate that contact and follow-up procedures are suspended for a specified period. When new copies of the survey forms are requested, a re-mail is initiated, and additional forms are sent to the respondent with the follow-up procedures kept in place. The compiler must update the information database if updated information is provided and run a check to confirm that correct details have been stored.
5.11 Automating available data. At the planning stage, it is important to consider which fields will be automatically completed by the computerized system. For example, would the date mailed field be updated directly by the mailing program? Provide sufficient space for addresses, etc.; it may be appropriate to subdivide fields for some items (for example, distinguishing the postal code from the remainder of the address). Take care when assigning default values to fields and (as a safeguard against inputting errors) have an accessible, online, separate file that lists those types of input that are currently acceptable for a specified field, so that unacceptable inputs will be rejected, for instance, entering a letter in a field that can accept only numbers. It is also useful to have a comment area for the respondent’s use.
5.12 Follow-up with respondents. When the closing date for the return of completed survey forms has passed, the national compiler can identify the overdue survey respondents from the response log, and can prepare labels for envelopes and follow-up documents. Of course, appropriate adjustments should be made in follow-up procedures for respondents who were granted extensions in their reporting deadlines.
5.13 Assessing progress made. A number of reports can be produced on a regular basis to assess the status of the survey:
- Transaction reports: Lists of changes to records sorted by name, ID code, date, etc.
- Response log reports: Summary counts of survey forms mailed, received, and percentage outstanding; response log listing all survey respondents, survey status sorted by name, ID code, etc.
Determining the Coverage of the Direct Investment Survey
5.14 Short exploratory survey. Source information may not indicate whether or not a unit is a direct investment (DI) or a direct investment enterprise (DIENT). One way to identify direct investment relationships is by conducting a short exploratory survey. As one of the prime reasons for undertaking the CDIS is to improve the overall quality of direct investment statistics, participating economies have agreed to provide information that is as comprehensive as possible. A decision needs to be made as to whether to undertake a census, or compile data from the largest survey possible.
5.15 Census. A census is highly useful for estimation as it provides the benchmark for estimating the universe in subsequent surveys-when samples may be used. For direct investment statistics, it is not necessary to conduct a census every year. Maintaining an up-to-date information database of all additions (and deletions) is an essential part of keeping the estimates as accurate as possible. Of course, not ever having a census survey will make it difficult to gross up the data.
5.16 Focusing on largest firms. For economies that have not undertaken a direct investment survey before, it will be highly beneficial to initially focus on the largest firms in their economies, with less attention given to smaller firms. After this experience has been gained in compiling direct investment statistics, consideration may be given to more sophisticated methods of compiling data, such as by conducting a smaller sample survey with estimation for nonsample firms. Undertaking a sample survey without a good understanding of the relative size and importance of the enterprises being surveyed may produce data that cannot be reliably grossed up (see paragraphs 5.30-5.33, “How to Address Low Coverage or Low Response Rates”) to a universe total.
5.17 Coverage and quality of results. As the CDIS is intended to provide the most comprehensive results possible, those economies already conducting direct investment surveys should make additional efforts to extend their coverage and to ensure that the results are as accurate, timely, and comprehensive as possible. This additional effort will require that the information database is as up-to-date as possible. It is also recommended that compilation practices follow the concepts and compilation practices that are summarized in this Guide.
5.18 Size of the universe. Conducting a survey4 requires prior knowledge of the approximate size of the universe. The size of the universe involves two major dimensions: the number of entities in the universe, and the individual value of their direct investment assets and liabilities. As economic statistics are primarily concerned with values, in any survey, the focus of a direct investment survey should be on those entities with substantial amounts. In this regard, it may be appropriate to conduct a census or comprehensive survey of those enterprises that constitute, for example, 90 percent of total positions with DIs (or of DIENTs) and to conduct a sample survey or use models to estimate the remaining 10 percent of data. However, it is also important to stress that there are increasing demands for data on small- and medium-size enterprises; therefore, sample surveys may need to be drawn so that estimates of adequate quality may be produced not just for the population as a whole but also for any subsets of particular analytic interest.
Draft Survey Questionnaires
5.19Appendix IV includes model survey forms for both inward and outward direct investment. These could serve as a starting point for the questionnaires to be used to collect the data, and they should be modified for local circumstances. In some instances, where a DIENT is also a DI, it may make sense to combine the information requested into a single form. The basis for much of the information to be collected is the entity’s balance sheet, and the information collected should take into account the accounting standards that respondents routinely follow in preparing and maintaining their records.
5.20 Information based on the books of the DIENT. The questionnaire should indicate that the information will be collected for statistical purposes and no confidential information will be divulged to third parties without the consent of the individual respondent to which this information pertains. It may be useful to highlight that the survey is being conducted as part of an international initiative coordinated by the IMF. As well, the questionnaire should provide advice on how the information is to be provided, setting out the measurement date, the currency of valuation, the valuation principles, as well as some additional information (such as the contact person’s details, and the industry of the entity). For outward direct investment, the questionnaire should also point out that the information to be reported should be that used on the books of the DIENT, rather than that of the DI. This will assist in international comparisons (as the information on inward direct investment would be the same) and it is probable that the information on the books of the DIENT is more current.
Communication with Respondents
Field Test with Key Respondents
About the end of December of year T-1 (that is, about 12 months before the reference date of the survey)
5.21 Having identified many of the major DIENTs (and/or DIs), national compilers need to develop an appropriate survey form, which should be field tested with the key respondents to: (1) inform them that the survey will be undertaken in the next year or so, and (2) to give the respondents an opportunity to provide comments on the survey form and to ask questions.
5.22 Having face-to-face discussions with key respondents is a very efficient way of eliminating potential reporting problems, thereby limiting the extent of the need for follow up and raising the quality of the data. In surveys for the compilation of economic statistics, accounting records are central. It is often the case that accountants and economic statisticians use the same terminology, yet the meanings may not be the same. Equally, economic statisticians may use terms (such as direct investment) that may not be understood in accounting terminology. Such matters can be clarified and the draft reporting instructions improved.
5.23 The survey form would need to identify the agency responsible for conducting the direct investment survey and under which authority the data are being collected, including sanctions for nonreporting, as relevant. See the section “Responsibility for Producing Direct Investment Statistics” (paragraph 5.3) for some additional details on the formal arrangements for conducting a survey.
Advance Notification to Identified Respondents
At about the same date (that is, about 12 months before the reference date)
5.24 Resources permitting, compilers could send a notification to all identified respondents to advise them that the survey of direct investment positions will be conducted, the reference date, and a summary of the information that will be requested.
About the end of March of year T (that is, about nine months before the reference date of the survey)
5.25 In addition to having one-on-one meetings with some key respondents, resources permitting, it may be useful for compilers to arrange training seminars for respondents. These seminars could review the survey form and identify any areas where respondents may not be familiar (such as the concept of residence or center of predominant economic interest). The point should be made that the information provided is confidential and only aggregated data will be published. The seminars also help public relations, and allow the compilers to advise respondents of the reasons for the survey. The seminars should serve as another opportunity to fine tune the questionnaire.
About the end of June of year T (that is, about six months before the reference date of the survey)
5.26 Conducting a trial run with a sample of respondents about six months before the reference date may provide many benefits, resources permitting. It may highlight where respondents have problems interpreting the questionnaire, and it may also serve to test the compiler’s processing system. Highlighting and addressing problems at this stage will reduce problems at a later, and more crucial, stage.
Re-contact Respondents to Remind Them of the Survey
About the end of November of year T (that is, about one month before the reference date of the survey)
5.27 It may help the response rate (at least, initially), if respondents are contacted (by mail or email) to remind them of the survey’s reference date and when data are due to be reported.
Mail Out the Survey, Along with Acknowledgment Cards
About the end of January of year T + 1 (that is, about one month after the reference date of the survey)
5.28 As part of the questionnaire that is sent to the respondents, resources permitting, it may be helpful to include acknowledgment cards. Respondents should be asked to return these cards immediately upon their receipt. For responses that have been received, this should be entered on the information database. For those requiring follow up, this should also be noted on the information database.
Reporting Date by Respondents
About the end of March of year T + 1 (that is, about three months after the reference date of the survey)
5.29 It is recommended that data for the survey should be requested within three months of the reference date. If it is later than this, respondents may forget to complete and return the questionnaire. For those respondents that have not reported, compilers should follow up. For responses that have been received, this should be entered in the information database. For those requiring follow up, this should also be noted in the information database.
How to Address Low Coverage or Low Response Rates
5.30 As the IMF is seeking the CDIS information to be provided within nine months of the reference date, some economies may find that they do not have complete responses to the survey. In order to report data that approximates the universe, there are various ways that estimates can be provided.
5.31 For economies that have conducted direct investment surveys previously and prepared universe estimates of positions, the previous estimates can be used as a starting point. For example, if a previous survey requested data on direct investment assets and liabilities, by counterpart economy, from 100 enterprises, and by the cut-off date for submission to the IMF, returns have been obtained from only 50 enterprises, the compiler can take the most recently reported or estimated direct investment position data applicable to those enterprises–presumably the position for end-year t–and update it for t+1 by adding to them an estimate of the balance of payment flows in t+1. If data permit, adjustments could also take into account changes in exchange rates.
5.32 In some cases, the information database may show that there has been a change in the ownership of some enterprises (for example, they may have been sold to others, resident in different economies, and these sales were reported in the financial press, and were captured in the information database). In such instances, instead of just using the economy breakdowns reported in the previous survey, the compiler can adjust them, based on the information in the database.
5.33 Such approaches may provide reasonably good estimates for data on positions. The methods used to derive universe estimates, when responses have been less than 100 percent, should be described in metadata.
5.34 However, for economies that have not conducted direct investment position surveys before, alternative approaches may be required.5 A starting point will be to utilize all data that are reported in time. Any expansion of these data to a universe level will necessarily be based on the judgment of the compiler. Metadata should be provided that explains the technique that is used for expansion. One technique would be to compare the enterprises that did report in time to those that did not-if the enterprises that reported data are believed to be more numerous, larger, and more likely to be involved in direct investment than those that did not report, then perhaps the reported data should be only conservatively increased, if at all.
Editing/Validating Collected Data
5.35 If, despite all the preparations, survey respondents submit poor quality data, then the value of the exercise is undermined.
5.36 Those compilers conducting a national survey for the first time need to be especially vigilant in checking data supplied. The more experience respondents have in completing the survey form, up to a point, the less likely that significant errors will be made.
5.37 National compilers can conduct editing/validation control checks on a number of levels. The compilers can include checks in the survey form, cross-check survey data against other reported data, and devise analytical checks.
5.38 This section provides some guidance on a range of possible checks. Nonetheless, it should be borne in mind that the more the survey form fits the domestic circumstances, and the more that survey respondents are consulted about what is required of them, then, inter alia, the greater the probability of receiving good quality data, and, perhaps just as important, the greater the likelihood of cooperation, if national compilers need to question data supplied by respondents.
5.39 As one of the purposes of the CDIS is for comparable data to be exchanged among participating economies, national compilers will receive data on their residents’ direct investment liabilities to, and assets with, nonresidents. Some broad checks on the data received–either by individual counterpart economy or on a global basis (i.e., total liabilities to nonresidents)–should be possible. The following subsections focus on the various checks.
Data Editing/Validation through the Questionnaire Form6
5.40 The sooner errors are spotted and corrected, the better. For this reason, it is recommended that national compilers consider devising a survey form that explicitly includes quality control checks and/or requires additional information, which can be used as a consistency check. However, if extra information is required, it should be kept to the minimum necessary, and the national compiler should be clear as to the purpose for the collection.
5.41 Among the tools that can help raise data quality are various computer systems that can allow for internal edits, including commercial spreadsheets; relational database management systems; and time series database management systems. Simple computer-checking procedures can be written to process reported data. Edit checks could include some of the following:
- If total assets and liabilities (including shareholders’ funds) are reported, do they equal?
- Are the assets with DIENTs (liabilities to DIs) equal to or smaller than total assets (liabilities)?
- Are reported transactions (in the balance of payments) consistent with the reported position data?7
- Where income is reported, do the rates of return on assets/liabilities make sense in light of rates of return available for other enterprises in the economy?
5.42 More generally, national compilers could require an official of the reporting company to certify that the information provided is complete and accurate; this could help ensure data quality and promote timely reporting. Similarly, requesting the name of a contact person helps ensure that follow-up inquiries are efficiently directed.
Data Editing/Validation through Analytical Checks
5.43 The degree to which analytical checks can be developed depends on the availability of comparable data. If data are available, the following checks can be devised:
5.44 If position data and flow data are independently assembled, then an attempt could be made to reconcile these data. To do so requires consideration of effects caused by different prices, exchange rates, other adjustments like write-offs, or reporting thresholds. Checks can be applied at the individual respondent and aggregate data levels.
5.45 In economies where the position data are being produced for the first time, but transactions data are available, an attempt could be made at reconciling position data, estimated by accumulating transactions data with reported position data. The method of calculating position data from transactions data is illuminated in Chapter 9 of the BPM6 Compilation Guide (BPM6 CG). The degree of deviation of the cumulated transactions and reported position data could be quite large and may show why accumulating direct investment flows is an unreliable method for estimating positions. However, if sizeable transaction data appear for an economy for which reported positions are small, it should be investigated.
Resident financial intermediary debt positions with nonresident financial intermediaries
5.46 Among the areas where particular attention should be paid is to the reported debt positions by financial intermediaries. Debt positions between selected types of financial intermediaries should not be included in direct investment. See paragraphs 2.212.24 for additional information.
Data Editing/Validation from the Viewpoint of the Counterpart Economy of the Direct Investor and Direct Investment Enterprise
5.47 Because comparable data may be exchanged among participating economies (subject to confidentiality constraints), national compilers shall receive data on the positions of the counterparties. While quality control is primarily the responsibility of national compilers, compilers in the counterpart economy may also be in a position to check the data received and to provide useful feedback to the counterpart compiler. See Chapter 6 for additional information in CDIS bilateral asymmetries.
5.48 Data provided by individual respondents are considered confidential and only aggregated data should be published. Some economies reporting to the IMF total direct investment positions bilaterally (that is, inward and outward totals, without a breakdown between equity and debt instruments) may overcome confidentiality problems that exist at the instrument level. Also, the Directional Principle basis is used in the CDIS, and so reverse investment between DIENTs and DIs is netted against investment by DIs in DIENTs. The publication of direct investment (net of reverse investment) thus may be allowed, even if reverse investment, by itself, would have to be suppressed (see paragraphs 4.21 and 6.5 for additional information).