Two more sources on Foreign Direct Investment

Foreign direct investment refers to direct investment equity flows in the reporting economy. It is the sum of equity capital, reinvestment of earnings, and other capital. Direct investment is a category of cross-border investment associated with a resident in one economy having control or a significant degree of influence on the management of an enterprise that is resident in another economy.

In the past I have already posted an item on possible sources with data on Foreign Direct Investment (FDI). These sources are OECD.Stats and Eurostat. Recently I found that there is another source that provides data on FDI: UNCTADSTAT.

Just like the other sources, it is easy to customise by countries, period, etc. Just click on the items you want to change. Export / save options include: Excel and CSV (Comma-Separated Version).

The World Bank World Development Indicators database also covers the subject Foreign Direct Investment. The selection of data for countries, time frame, etc, can all be changed. Export options include Excel, XML and CSV.

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Risk-Free Rate data sources

The past few years one of the questions I get asked a lot is: what is a good source for the Risk- Free Rate of a country? The definition of Risk-Free Rate or ‘Risk-Free Rate Of Return‘ is: the theoretical rate of return of an investment with zero risk. The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time (Investopedia).
As there is no risk free investment, the risk-free rate is usually considered to be the rate on government bonds (by way of a proxy) as a measure of the minimum risk you run on any investment (Wikipedia). The risk of default on payment of interest on government bonds is usually considered to be minimal or non-existent. They are also considered a measure of the financial stability of a country. Two types of government bonds are usually referred to for the benchmark interest rate:

One of the databases that can be used to download the Risk-Free Rate is the OECD.Stats Extract database (a license / subscription is required). Just type in interest rate in the search box on the website and you will get the options in the search result on the left side of the screen. See below:

Both the 3 Month rates and 10 Year Bond interest rates are available for many countries. Next to each nation the darkblue round i-button allows you to call up specific details on the source of the data for each country. The information will be presented on the right side of the screen. Using the options above the default table you can change frequencies, time period, etc. The data can be saved to Excel or as Comma Separated Text (CSV).

A second possibility to get data on the Risk-Free Rate is the IMF International Financial Statistics (IFS) database. Both short term and long term interest rate percentages can be downloaded for government bonds. In the start website you first need to select the option “Data Source” or go directly to the dataset IFS:

Next you need to take 4 steps to create a search: Country, Concept, Data Source & Time. When you get to the second search step (Concept) you can use the Quick filter search bar to search for “Interest rate“:

When you are done making a selection the result is presented as a table. The Table can be edited/changed by clicking the option (top left corner): “Back to query builder“. The result can be exported to Excel or as Comma Separated Text (CSV). The result looks as follows:

A third good database with Risk Free Rate data is Datastream. It has much data (depending on the license) on all sorts of bonds, Notes and treasury bills. The learning curve is bigger if you want to use Datastream compared to OECD.Stats and IMF IFS but it has more data. Datastream, for instance, offers the data frequency options of Weekly and Daily where the OECD and IMF sources only offer the data frequencies Annual, Quarterly and Monthly.
Identifying the right Treasury Bills and 10 Year Government bonds in Datastream is a bit more difficult: some series can be found under the Data Category “Bonds & Convertibles” but most of the 10 Year Government bonds are available under the Data Categories Interest Rates or Economics. The reason is, that the 10 Year Government bonds are considered to be key economic indicators. On the Datastream extranet a list is given of Risk free rate series for several countries but it is in no way a complete list. I suggest you determine their usefullness for yourself.
In a previous blog post you can find out more on Datastream and looking up Government Bond data.

N.B.: There are other sources that also have Risk-Free Rate data but the three mentioned above are (in my view) the best and easiest to customize or use. Some of the other databases are: World Bank Open Data, Eurostat & UN Monthly Bulletin of Statistics. See also: FinaBase blog.

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Foreign Direct Investments in countries

One interesting subject for research is Foreign Direct Investment (FDI). In a nusthell this means investments made by a company based in one country, into one or more companies in another country. A more comprehensive and full description is available at Investopedia. There are many different sources out there if you need specific data on FDI. You can visit websites of national statistics bureaus or national banks and they usually offer up reports and data on the subject.

There are two sources that offer detailed data for many countries: Eurostat and OECD.Stats. The Eurostat website offers data for many EU countries and can be accessed free of charge. The part where FDI information is available on OECD.Stats requires a subscription by you or the organisation where you work!

On the Eurostat statistics website the FDI data can be found by navigating to the right place or doing a search. Navigate by clicking :
> Database by themes
> Economy and Finance
> Balance of Payments / International transactions (bop)
> European Union Direct Investments (bop_fdi).

The available data offers FDI breakdowns by main indicators, countries, partner countries & economic activity. See below for a screenshot.

When you choose a specific dataset you can further customize it with the options available: by time period, countries, etc. The data can be saved for a spreadsheet program like Excel:

The OECD.Stats website covers FDI data under the section-theme Globalisation. There are specific datasets on FDI flows (inward and outward): by  industry, by partner country, positions by industry, positions by partner country and BOP and IIP aggregates. When you have selected a dataset it is immediately presented on your screen. It is then possible to customize the dataset and then download the data for a spreadsheet program like Excel:

Both sources use raw data that was originally provided by the statistical bureaus of countries or central banks but has been adjusted afterwards to make the data comparable for the countries. The data from Eurostat comes directly from the National sources. The OECD.Stats data is provided by the OECD and IMF (who in turn probably have received the data from Eurostat or the national statistics sources). The information on the origin of the data is available at both websites.

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R&D Expenditures for countries & industries

There are several sources that have data on investment or expenditure on Research and Development in countries. The amount each country/government spends on Research & Development is a key indicator of government and private sector efforts to obtain competitive advantage in science and technology.
Several sources include data for several countries but is usually only covers general data like “Gross domestic expenditure on R&D (GERD) as a percentage of GDP” (= Gross Domestic Product). Some of these sources list this data for the following broad categories of funding: Business enterprise sector, Government Sector, Higher Education sector, and Private, non-profit sector. An example is the European database/website, called Eurostat:

If you need more detailed information a good source (if your organisation has a license to it) is the SourceOECD iLibrary. This database has a dataset called “Business enterprise R-D expenditure by industry“. The dataset presents research and development (R&D) expenditure statistics performed in the business enterprise sector by industry according to the International Standard Industrial Classification (ISIC) revision 3.1. Data are presented from 1987 onwards (to, currently, 2010). This breakdown between industries is, in principle, made at the enterprise level, although some countries are able to break down R&D data for multi product enterprises between their main lines of business. Example:

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Historical tax rates

A while ago I needed to find information on tax rates for a couple of countries and had some difficulty finding them in general commercial financial or economic databases. In the end even national bank websites or websites like the those of ministries of finance or the European Union, etc. usually only list the last tax rates or aggregated figures. Wikipedia examples of overviews are:

The World Bank also has information on taxes (no free access!) on their website: World Bank Total Tax rates. The US also has a nice website on taxes in different states, called: US Capital Gains Tax Rates.

What I wanted to find, however, were historical overviews of rates by type for several years. For instance: corporate and capital income taxes. After searching a bit further I finally found the following source for this type of information: the OECD Tax Database.

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