From the October 1997 SURVEY OF
CURRENT BUSINESS
The operations of nonbank U.S. multinational companies (MNC's)grew more rapidly in 1995 than they had grown, on average, since 1982—the year in which this annual series began./1/ According to preliminary estimates from BEA's annual survey of U.S. direct investment abroad for 1995, worldwide gross product of U.S. MNC's (U.S. parents and majority-owned foreign affiliates combined) grew 6 percent, compared with an average annual increase of 4 percent in 1982–94; employment increased 1 percent, compared with negligible growth; and capital expenditures increased 8 percent, compared with a 2-percent increase (table 1)./2/
The above-average growth in 1995 partly reflected continued economic growth in the United States and in most foreign host countries. The growth was accounted for by both the expansion of existing MNC operations and the acquisition and establishment of new operations. In addition, dollar-denominated measures of the operations of foreign affiliates were boosted by the appreciation of host-country currencies against the U.S. dollar in 1995.
For U.S. parents, two of these three key measures of operations grew at about the same rate in 1995 as in 1982–94. Gross product increased 3 percent, compared with 4 percent in 1982–94, and employment was essentially unchanged, as it had been in 1982–94. However, capital expenditures grew 8 percent in 1995, compared with 2 percent in 1982–94; the 1995 increase was concentrated in the communications and public utilities industries and probably reflected factors specific to these industries more than it did general business conditions.
For majority-owned foreign affiliates (MOFA's), operations grew much faster in 1995 than in 1982–94. Gross product increased 15 percent in 1995, compared with 5 percent in 1982–94; employment increased 5 percent, compared with 1 percent; and capital expenditures increased 8 percent, compared with 4 percent.
Additional highlights of U.S.-MNC operations in 1995 follow:
Revisions to the 1994 estimates.—The estimates of U.S.-MNC operations for 1994 were revised to incorporate the final results of the 1994 Benchmark Survey of U.S. Direct Investment Abroad./3/ For most of the key items, the revisions from the preliminary estimates were small. Gross product was revised down 0.2 percent; employment was revised down 1.0 percent; and capital expenditures was revised up 0.8 percent.
Organization of the article.—This article has three parts. The first part analyzes the worldwide operations of U.S. MNC's; the second part analyzes their domestic—U.S.-parent—operations; and the third part analyzes their foreign—foreign-affiliate—operations.
This section examines U.S.-MNC operations in their totality, and compares the domestic and foreign components./4/
Gross product of all U.S. MNC's grew 6 percent in 1995, to $1,821 billion. The 1995 increase was partly attributable to growth in real gross product and partly attributable to changes in prices and exchange rates. The gross product of U.S. parents grew 3 percent, only slightly exceeding U.S. price inflation (as measured by the implicit price deflator for U.S. gross domestic product). The gross product of MOFA's grew 15 percent, roughly double the combined increases in foreign prices and the U.S.-dollar price of foreign currencies./5/ This information suggests that real MOFA gross product grew substantially in 1995 and that it accounted for most of the growth in real U.S.-MNC gross product.
Worldwide production and the productive resources of U.S. MNC's remained concentrated in the United States: In 1995, U.S. parents accounted for about three-quarters of MNC gross product, capital expenditures, and employment and for about two-thirds of profit-type return. From 1982 to 1995, however, the distribution shifted modestly from the United States to abroad: The MOFA share of worldwide MNC gross product rose from 22 percent to 25 percent; the MOFA share of MNC capital expenditures rose from 18 percent to 24 percent; and the MOFA share of MNC employment rose from 21 percent to 24 percent (table 2). The MOFA share of worldwide MNC profit-type return was essentially unchanged—32 percent in 1995, compared with 31 percent in 1982./6/ The stability in the MOFA share of profit-type return probably reflects changes in economic conditions here and abroad that were relatively less favorable to MOFA's in 1995 than in 1982./7/
By industry, the shift towards foreign operations was most pronounced in petroleum and in manufacturing./8/ In petroleum, the MOFA share of MNC gross product rose from 37 percent in 1982 to 46 percent in 1995; the MOFA share of MNC capital expenditures rose from 23 percent to 38 percent; and the MOFA share of MNC employment rose from 23 percent to 27 percent. The growth in MOFA shares partly reflected the fall in oil prices in 1982–86, which caused some oil extraction projects in the United States to become unprofitable. In response, U.S. oil companies discontinued some domestic projects and spent a greater share of their exploration-and-development budgets on projects overseas, where costs were often lower.
In manufacturing, the MOFA share of MNC gross product rose from 22 percent in 1982 to 29 percent in 1995; the MOFA share of MNC capital expenditures rose from 23 percent to 29 percent; and the MOFA share of MNC employment rose from 26 percent to 31 percent. The growth in the MOFA shares partly reflected the increased globalization of economic activity that occurred during this period, when both production abroad by U.S. MNC's and production in the United States by foreign MNC's were expanding. Production abroad by U.S. MNC's may have been stimulated by structural economic changes, such as the enlargement and further integration of the European Union and the economic liberalizations in Latin America and in Eastern Europe, that created new market opportunities in host countries.
This section examines the origins of MNC output and how the pattern of the origins of output has changed from 1982 to 1995. The output of U.S. MNC's (sales to unaffiliated customers plus inventory change) reflects both gross product originating within the MNC's themselves and gross product that originates elsewhere and is embodied in intermediate inputs purchased from outside suppliers. The gross product originating in U.S. MNC's reflects the gross product of both the U.S. parents and their foreign affiliates.
Since 1982, the origin of U.S.-MNC output has shifted modestly toward outside suppliers: The percentage of output originating within MNC's themselves decreased from 36 percent in 1982 to 33 percent in 1995 (table 3, column 8), and the percentage accounted for by purchases from outside suppliers increased from 64 percent to 67 percent. The percentage of MNC output accounted for by U.S.-parent gross product decreased from 28 percent to 25 percent. The percentage of MNC output accounted for by MOFA gross product edged up from 8 percent to 9 percent; although the reliance of MOFA's on their own gross product decreased, their share of total MNC output increased.
The increased reliance of MNC's on outside suppliers partly reflected the widespread efforts of U.S. corporations during the 1990's to focus their resources on the portions of the production process in which they had the clearest advantage and to outsource, or contract out, the rest. This change was widespread across industries, but it was most pronounced in manufacturing.
In 1995, U.S.-MNC-associated trade—U.S. trade involving U.S. parents, their foreign affiliates, or both—accounted for 62 percent of all U.S. exports of goods and for 39 percent of all U.S. imports of goods (table 4 and chart 2). A substantial share of the remaining U.S. exports and imports of goods is associated with U.S. affiliates of foreign companies. In 1995, 23 percent of U.S. exports of goods and 34 percent of U.S. imports of goods were associated with U.S. affiliates./9/
Of the $363 billion in U.S.-MNC-associated exports, 41 percent represented trade between U.S. parents and their foreign affiliates—intra-MNC trade—and 59 percent represented U.S.-MNC trade with others. Of the $213 billion in trade with others, 88 percent represented exports shipped by U.S. parents to foreigners other than their foreign affiliates, and 12 percent represented exports shipped to foreign affiliates by U.S. persons other than their U.S. parents.
Of the $288 billion in U.S.-MNC-associated imports of goods, 44 percent represented intra-U.S.-MNC trade, and 56 percent represented U.S.-MNC trade with others. Of the $163 billion in trade with others, 83 percent represented imports shipped to U.S. parents by foreigners other than their foreign affiliates and 17 percent represented imports shipped by foreign affiliates to U.S. persons other than their U.S. parents.
This section examines the following selected aspects of the domestic (U.S.-parent) operations of U.S. MNC's: The 1994–95 change in U.S.-parent gross product by industry and by source of change; the U.S.-parent share of the gross product of all private U.S. businesses in 1982 and 1994; and the origin of U.S.-parent output in 1982 and 1995.
The gross product of all U.S. parents increased 3 percent in 1995, to $1,358 billion, compared with a 4-percent increase in 1982–94 (table 5).
By industry.—In 1995, increases were most rapid in primary and fabricated metals (18 percent), electronic and other electric equipment (9 percent), services (7 percent), and petroleum (6 percent). The increases in primary and fabricated metals and in petroleum reflected both increases in real gross product and higher product prices in the United States. The increases in the remaining industries partly reflected parents' expansion through acquisitions.
By source of change.—Changes in the gross product of U.S. parents are the net result of changes in existing operations, of parents entering the survey universe because they established or acquired their first foreign affiliate, of parents departing the universe because they sold or liquidated their last foreign affiliate, and of other changes (table 6). In 1995, most of the increase in gross product was attributable to changes in existing operations.
The gross product of U.S. parents accounted for 25 percent, or $1.3 trillion, of the gross product of all private U.S. businesses in 1994; it had accounted for 33 percent in 1982 (table 7)./10/ The decline since 1982 mainly reflected the concentration of U.S. parents in manufacturing, a slower growing segment of the economy.
By industry, the shares accounted for by U.S.-parent gross product varied widely./11/ In 1994, parents in manufacturing accounted for 63 percent of total U.S. gross product in that industry; those in services, for 7 percent; and those in all other industries combined, for 16 percent. The high share of the parents in manufacturing may reflect firm-specific advantages possessed by U.S. manufacturers that lead them to serve foreign markets primarily through direct investment rather than through international trade./12/
The low share of the parents in services reflects a variety of factors. U.S. direct investment in some service industries may be inhibited by the structure of those industries in some host countries. For example, U.S. direct investment in health care services is constrained, or in some cases precluded, in countries where the government plays a prominent role in the delivery of health care. In addition, some service industries that are characterized by small-scale production may lack the firm-specific advantages that often provide the basis for direct investment in other industries.
This section examines the origins of the output of U.S. parents and how the pattern of the origins of output has changed from 1982 to 1995. The output of U.S. parents (sales plus inventory change) reflects both gross product originating within the parents themselves and gross product that originates elsewhere and is embodied in intermediate inputs purchased from foreign affiliates and from outside suppliers.
The origin of U.S.-parent output has shifted modestly toward outside suppliers: The percentage of the output of U.S. parents that was accounted for by their own gross product decreased from 34 percent in 1982 to 32 percent in 1995 (table 8, column 11). The shift to outside suppliers was more pronounced for parents in manufacturing (especially in industrial machinery and equipment and in electronics and other electric equipment); their gross product share of output dropped from 42 percent in 1982 to 35 percent in 1995. The reliance on imported inputs increased substantially for parents that manufacture computer components and semiconductors.
In all industries combined, the share of U.S. parents' total output that was accounted for by local (U.S.) content remained high, at 94 percent, in 1995, compared with 95 percent in 1982. However, the local-content share of parents in wholesale trade and in manufacturing decreased substantially. In wholesale trade, the share decreased from 93 percent to 86 percent. In manufacturing, it decreased from 96 percent to 92 percent. Within manufacturing, the decreases were most pronounced in industrial machinery and equipment, in electronic and other electric equipment, and in transportation equipment.
Judging from the patterns of trade between U.S. parents and their MOFA's, about three-fifths of the decrease in the local-content share in manufacturing reflected increased imports from high-wage countries, and about two-fifths reflected increased imports from low-wage countries./13/ Among the imports from high-wage countries, imports from Canadian affiliates producing cars and trucks and imports from Canadian and European affiliates producing computers and components were the most significant. Among the imports from low-wage countries, imports from affiliates in Singapore, Mexico, Malaysia, Taiwan, Hong Kong, and China producing consumer electronics and computer components and imports from Mexican affiliates producing cars and trucks were the most significant.
This section examines selected aspects of the foreign (foreign-affiliate) operations of U.S. MNC's. First, the 1994–95 change in employment by all affiliates is examined, and the patterns of acquisitions and establishments of affiliates in 1995 are presented. The remainder of the section focuses on selected aspects of the operations of majority-owned foreign affiliates (MOFA's): Changes in the gross product of MOFA's by area, by industry, and by source of change; the MOFA share of host-country gross domestic product; the origin of MOFA output in 1982 and 1995; and changes in the real gross product of MOFA's in manufacturing.
The broadest perspective on the foreign operations of U.S. MNC's is that of all foreign affiliates. The examination of the operations of these affiliates uses data on employment because estimates of gross product are available only for MOFA's (see footnote 4).
Changes in employment by area and by industry.—The total employment of nonbank foreign affiliates increased 4 percent to 7.4 million in 1995, compared with a 1-percent increase in 1982–94 (table 9). By area, most of the increase was accounted for by affiliates in Asia and Pacific and in Europe. By industry, most of the increase was accounted for by affiliates in manufacturing, in "other industries" (mainly retail trade and communications), and in services. The largest increases in employment occurred among affiliates in labor-intensive industries, such as European affiliates in personnel supply services and Asian affiliates in electronics assembly and in fast-food restaurants. The rise in employment was also attributable to the merger with, or acquisition of, some large European companies by U.S. parents.
Acquisitions and establishments.—In 1995, 278 affiliates with a combined employment of 145,000 were established or acquired by U.S. MNC's (table 10). As in 1990–94 (the other years for which estimates are available), high-wage countries were the primary location for new affiliates. Affiliates in high-wage countries accounted for almost three-quarters of all of these affiliates and of their employment. This large share suggests that U.S. direct investment abroad tends to be attracted more by access to large and prosperous markets than by access to low-wage labor.
Manufacturing continued to be the primary industry for new investments in 1995; it accounted for 40 percent of all new affiliates and for 42 percent of the employment of these affiliates. Industries other than those producing goods also attracted a substantial number of new investments. For example, some U.S. electric power companies acquired foreign affiliates through host-country privatizations.
In 1995, 89 percent of all foreign affiliates were majority owned. This high percentage is consistent with the "internalization" theory of the origins of MNC's, which suggests that MNC's tend to have firm-specific advantages that must be preserved by a high degree of control over operations (see footnote 12).
In all but a few countries, well over half of all affiliates are majority owned. The following countries are among those that had a relatively low percentage of MOFA's in 1995: Saudi Arabia (48 percent), Israel (50 percent), and India (51 percent). In some of these countries, there are (or historically have been) laws that constrain the level of foreign ownership of domestic businesses, either by limiting the level of foreign ownership or by assessing lower taxes on, or by providing other benefits to, businesses that have majority local ownership.
Changes in gross product.—The gross product of MOFA's increased 15 percent in 1995, to $463.0 billion, compared with a 5-percent increase in 1982–94 (table 11). Much of the 1995 increase appears to have been attributable to changes in exchange rates and prices, but it may also reflect growth in real gross product (see "Real Gross Product of MOFA's in Manufacturing" on page 59).
By area, affiliates in Europe and in Asia and Pacific accounted for most of the increase in MOFA gross product. In Europe, much of the increase was attributable to the appreciation of host-country currencies against the dollar: In France, MOFA gross product increased 9 percent, and the franc appreciated 10 percent relative to the dollar; in Germany, MOFA gross product increased 11 percent, and the mark appreciated 12 percent; and in the United Kingdom, MOFA gross product increased 13 percent, and the pound appreciated 5 percent.
In Asia and Pacific, the increases in MOFA gross product are more likely to reflect growth in real gross product rather than currency-translation (or price) effects: In Hong Kong, MOFA gross product increased 37 percent, and the value of the Hong Kong dollar against the U.S. dollar was steady; in Indonesia, MOFA gross product increased 26 percent, and the rupiah depreciated 4 percent; and in Singapore, MOFA gross product increased 33 percent, and the Singapore dollar appreciated 9 percent. The increases in Hong Kong and Singapore were largely attributable to affiliates that produce computer and other electronic goods, mainly for export to the United States.
By industry, affiliates in manufacturing and in wholesale trade accounted for most of the increase in MOFA gross product.
Year-to-year changes in the MOFA gross product are the net result of changes in existing operations, acquisitions and establishments of affiliates, sales of affiliates to foreigners, liquidations of affiliates, and other changes. In 1995, most of the increase in MOFA gross product was attributable to changes in existing operations (table 12).
MOFA share of host-country GDP.—In 1995, the gross product of MOFA's accounted for 6 percent or more of the gross domestic product (GDP) of six of the host countries shown in table 13: Ireland (16 percent), Canada (9 percent), Singapore (9 percent), Honduras (8 percent), United Kingdom (6 percent), and Costa Rica (6 percent).
The relatively high MOFA shares of host-country GDP in the United Kingdom, Canada, Singapore, and Ireland can be traced to some of the following factors: (1) A common language with the United States, (2) marketing and commercial legal systems similar to those in the United States, (3) geographic proximity to the United States, (4) the availability of a skilled work force, (5) political stability, and (6) low corporate tax rates. The comparatively high MOFA shares of GDP in Costa Rica and Honduras partly reflect the important role of U.S.-owned agricultural production in those countries' small and relatively undiversified economies.
The MOFA share of host-country GDP was less than 1 percent in seven countries: Turkey, South Africa, Japan, the Republic of Korea, Saudi Arabia, China, and India. The low shares in most of these countries probably reflect past or present, formal or informal, barriers to investment. In South Africa, the low share reflects both the investment that failed to occur and the disinvestment that did occur during the 1980's in response to various pressures arising from the former South African system of apartheid./14/ Although MOFA gross product in that country began to grow again following the abolition of apartheid, by 1995, only a small percentage of the investment that was lost had been regained.
Origin of output.—This section examines the origins of MOFA output and how the pattern of the origins of output has changed from 1982 to 1995. The output of MOFA's (sales plus inventory change) reflects both gross product originating within the MOFA's themselves and gross product that originates elsewhere and is embodied in intermediate inputs purchased from U.S. parents, other foreign affiliates, or from other suppliers.
The origin of MOFA output has shifted toward outside suppliers: The percentage of total MOFA output accounted for by their own gross product decreased from 31 percent in 1982 to 26 percent in 1995 (column 12 in tables 14 and 15). This shift was concentrated in manufacturing and was widespread across geographic areas.
The U.S. content of MOFA output rose from 7 percent in 1982 to 9 percent in 1995. This increase was largely limited to affiliates in wholesale trade. By area, U.S. content rose in Canada, in Latin America and Other Western Hemisphere, and in Asia and Pacific.
Real gross product of MOFA's in manufacturing.—Earlier this year, BEA presented experimental estimates of real gross product for MOFA's in manufacturing for 1982–94./15/ These estimates provided more accurate comparisons of gross product across time and across countries than the current-dollar estimates, because they excluded the effects of prices and exchange rates. This section updates those estimates through 1995.
In 1995, the real gross product of MOFA's in manufacturing in 19 member countries of the Organisation for Economic Co-Operation and Development (OECD) increased 2 percent, compared with a 13-percent increase in the current-dollar estimates (table 16)./16/ Most of the difference in these growth rates appears to have been related to changes in exchange rates rather than changes in prices. The average increase in the dollar price of the currencies of the 19 OECD countries was 6 percent, whereas the average price inflation in these countries was only 2 percent./17/
In 1995, as in most years, changes in real MOFA gross product mirrored changes in total host-country production. Industrial production in the 19 OECD countries grew 3 percent, on average, compared with a 2-percent increase in real gross product for MOFA's in these countries (chart 3).
Footnotes:
1. This article does not cover the operations of U.S. MNC's in banking, because they are exempt from reporting on the BEA surveys on which the estimates are based.
2. Unless otherwise indicated, average annual growth rates are used for comparisons.
3. The preliminary 1994 estimates appeared in "Operations of U.S. Multinational Companies: Preliminary Results from the 1994 Benchmark Survey," SURVEY OF CURRENT BUSINESS 76 (December 1996): 11–37.
4. In most of this section, the foreign operations of U.S. MNC's are examined using the data for majority-owned foreign affiliates (MOFA's) rather than those for all foreign affiliates. The data for MOFA's are used because, conceptually, parents and MOFA's are unambiguously under the same (U.S.) managerial control, whereas other foreign affiliates may be under the control of foreign owners. Practically, the data for MOFA's are used because the necessary data items for this analysis are collected only for MOFA's.
Although MOFA's and U.S. parents are unambiguously under the control of the U.S. parent(s), these parents may be under the control of a foreign parent company; in 1995, 11 percent of all U.S. parents were ultimately controlled by foreign parents.
5. In 1995, the weighted average U.S.-dollar price of the currencies of the top 25 host countries (in terms of MOFA gross product) rose 4 percent, which would have raised the dollar value of MOFA gross product by a similar amount, assuming that the underlying survey data were translated from foreign currencies as is generally necessary. The weighted average price inflation in these countries (as measured by the implicit price deflator for gross domestic product) was 3 percent in 1995.
6. Profit-type return measures profits from current production. Unlike net income, it is before income taxes, and it excludes nonoperating items (such as special charges and capital gains and losses) and income from equity investments.
7. The U.S. economy was in recession in 1982, whereas the economies of the European member countries of the Organisation for Economic Co-Operation and Development (OECD) were still growing. In 1995, economic growth rates were similar in the United States and in the European member countries of the OECD.
8. In BEA's direct investment statistics, petroleum is presented as a "major industry" that consolidates all the activities associated with petroleum production, transportation, and distribution. Consequently, in this article the data for these activities are excluded from major industries in which they would usually be included. In particular, manufacturing excludes petroleum and coal products manufacturing, mining excludes oil and gas extraction, wholesale trade excludes petroleum wholesale trade, retail trade excludes gasoline service stations, and transportation excludes petroleum tanker operations, pipelines, and storage.
9. There is some duplication between the U.S.-MNC and U.S. affiliate shares cited in the text because some U.S. parents belong to both groups. For these parents, part of their "trade with others" represents trade with their foreign parent groups. In 1995, trade between U.S. parents and their foreign parent groups accounted for 5 percent of U.S.-MNC-associated U.S. exports of goods and for 17 percent of U.S.-MNC-associated U.S. imports of goods.
For a discussion of the pattern of U.S. affiliates' trade in 1977–91, see "Merchandise Trade of U.S. Affiliates of Foreign Companies," SURVEY 73 (October 1993): 52–65. More recent estimates appear in "Foreign Direct Investment in the United States: New Investments in 1996 and Affiliate Operations in 1995," SURVEY 77 (June 1997): 42–69. For a detailed discussion of intra-MNC U.S. trade of both U.S. MNC's and U.S. affiliates of foreign companies, see "U.S. Intrafirm Trade in Goods," SURVEY 77 (February 1997): 23–38.
10. The U.S.-parent share for 1995 could not be computed, because the 1995 estimates of U.S. gross domestic product by industry were not available when this article was prepared. Those estimates are scheduled to appear in an upcoming issue of the SURVEY.
11. At the all-industries level, the estimates of U.S.-parent gross product are generally conceptually consistent with the estimates of gross product for all U.S. businesses in the national income and product accounts. However, for individual industries, inconsistencies may result from differences in the basis for the industrial distribution of the estimates. The gross product for all U.S. businesses is distributed among industries on the basis of the principal product or service of each establishment, or plant, whereas U.S.-parent gross product is distributed on an enterprise, or company, basis in which each U.S. parent is classified in the principal industry of all its establishments combined. Because the establishments of a large company may be classified in different industries, the distributions of data by industry of establishment can differ significantly from those by industry of enterprise, particularly at detailed levels of disaggregation. In this article, U.S.-parent gross product as a share of the gross product for all private U.S. businesses is computed only at the highly aggregated level shown in table 7.
12. The "internalization" theory of the origins of MNC's suggests that MNC's tend to have firm-specific advantages that require a high degree of control over operations if the advantages are to be preserved. These advantages, such as superior production or marketing techniques, allow MNC's to overcome the various barriers to investing abroad, such as foreign languages and unfamiliar business environments. For an elaboration of this theory and other theories on the origins of MNC's, see J. David Richardson, "Multinational Companies: Descriptions and Dimensions," in Understanding International Economics, Theory and Practice (Boston: Little, Brown, and Company, 1980).
13. Information for 1995 on the countries of origin and destination of trade is available only for this portion of U.S.-MNC-associated trade.
The distinction between high-wage countries and low-wage countries is based on estimates of average hourly wages of production workers of MOFA's in manufacturing; the estimates were derived from data collected in the 1994 Benchmark Survey of U.S. Direct Investment Abroad. To ensure the statistical significance of the data underlying this distinction, the analysis is restricted to host countries in which employment by these MOFA's totaled at least 10,000 employees in 1994.
14. The negative U.S. public reaction to apartheid led to conditions that caused some U.S. companies to disinvest, or not to invest, in that country at that time. The companies may have acted for reasons of conscience or for legal or economic reasons. In 1986, for example, U.S. laws were enacted that prohibited new investments, and that repealed the foreign tax credit on existing investments, in South Africa.
15. See "Real Gross Product of U.S. Companies' Majority-Owned Foreign Affiliates in Manufacturing," SURVEY 77 (April 1997): 8–17.
16. Estimates are unavailable for MOFA's in manufacturing in other countries, because one of the data items needed for deflation—the implicit price deflator for U.S. gross domestic product in manufacturing—is not yet available for 1995. Nonetheless, the 19 countries for which the estimates are available account for nearly 80 percent of the worldwide gross product of MOFA's in manufacturing.
17. Both of the measures used in this comparison have been weighted by the real gross product of MOFA's in manufacturing. The implicit price deflator for gross domestic product was used as a measure of price inflation.
