Experimental Statistics - Enterprise Groups

Multinational enterprise groups have an important role in the EU economy, but also in the economy of each country. They contribute substantially to the production of goods and services, employment and investment.
Statistics on enterprise groups have not been published so far. To meet this need for information, Eurostat has initiated the publishing of experimental statistics on multinational enterprise groups in the EU on their website^[1]. The Republic of Croatia participates in the production of these statistics by submitting data on parts of multinational enterprise groups on its territory.
Why are the data published as experimental statistics?
The main reason is that these statistics are not regulated and the article aims to grasp on potential user needs and to seek for feedback before switching to official statistics.
 
 

Enterprise groups in the Republic of Croatia
 
The data on enterprise groups that are the basis of these statistics come from the Statistical Business Register of the Croatian Bureau of Statistics.
Statistical Business Register (hereinafter referred to as: SBR) is a complete, comprehensive, structured and regularly updated database of legal and statistical units included in the production of goods and services. SBR provides the frame for conducting statistical surveys, statistical analysis of population of business entities and for the compilation of business demography statistics, for establishing links with administrative sources and for identifying and creating statistical units.
The types of units registered in the SBR are legal units, enterprises, local units, enterprise groups and non-resident units linked by ownership with resident units.
An enterprise group, as defined by the Regulation on statistical units^[2], is an association of enterprises bound together by legal and/or financial links. It can have more than one decision-making centre, especially for policies on production, sales and profits. It may also centralise certain aspects of financial management and taxation. It constitutes an economic entity which is authorised to make decisions, particularly concerning the units which it comprises.
In accordance with the Regulation on European business statistics^[3], all Member States are obliged to collect data on enterprise groups (multinational and resident) in their national statistical business registers.
The following types of enterprise groups are registered in the SBR:

1. All-resident enterprise group

2. Multinational enterprise group

Domestically-controlled enterprise group is an enterprise group controlled by a group head that has its headquarters resident in territory of the Republic of Croatia, but has affiliates (dependent business entities) outside the territory of the Republic of Croatia.

Enterprise groups are formed in the Statistical Business Register based on data from administrative sources (Court Register, Central Depository and Clearing Company, consolidated Annual Financial Statements) and based on data from statistical surveys and the EuroGroups Register (European Register of Enterprise Groups).
 
 

Enterprise groups by type
 
The largest number of enterprise groups out of the total number of registered and active groups in the SBR are multinational enterprise groups. In 2020, they had a share of 71.3%, while the share of all-resident enterprise groups was 28.7%. Foreign-controlled enterprise groups prevailed in multinational enterprise groups with a share of 63.9% in the total number of enterprise groups. Multinational groups whose group head is the resident of the Republic of Croatia had the smallest share – 7.4%.
 
Table 1 Number of enterprise groups in the Republic of Croatia, by type of enterprise groups

 
Figure 1

 
When taking into account the country where the head of the multinational group has its headquarters, the vast majority of enterprise groups in the Republic of Croatia are "European groups”, whose head of the group has its headquarters in one of the EU or EFTA countries.
 
Table 2 Multinational enterprise groups, by country of headquarters of enterprise group head

 
Figure 2

 
When looking at the "nationality" of foreign-controlled enterprise groups, the largest share of enterprise groups operating on the territory of the Republic of Croatia belonged to those whose group head is registered in Austria, Slovenia or Italy.
 

Number of legal units in enterprise groups
 
Legal units that belong to enterprise groups are trade companies and institutions, which are interconnected by ownership links or links of control.
Table 3 and Figure 3 show that more legal entities belonged to multinational enterprise groups than to all-resident groups, but this share is not as dominant as when it comes to the number of groups.
 
Table 3 Number of legal units in the Republic of Croatia belonging to enterprise groups

 
Figure 3

 

Number of persons employed in enterprise groups

The influence of enterprise groups in the economy of a country is significant if the number of persons employed by legal units that are part of these groups is taken into account.
In 2020, more than 506 000 persons were employed in enterprises that were part of enterprise groups. It is almost a third of all employed in the Republic of Croatia.
In terms of the number of persons they employ, multinational foreign-controlled enterprise groups were again the most dominant, employing on average 43% of all persons employed in legal units that are part of enterprise groups.
 
Table 4 Number of persons employed in legal units that are part of enterprise groups

 
Figure 4

 
Multinational groups whose head has its headquarters in Germany, the Netherlands and Austria had the largest share in the number of persons employed in enterprise groups.
 

Legal framework:

1. Regulation (EC) No 177/2008 of the European Parliament and of the Council of 20 February 2008 establishing a common framework for business registers for statistical purposes and repealing Council Regulation (EEC) No 2186/93 (OJ L 61, 5 March 2008)
2. Council Regulation (EEC) No 696/93 of 15 March 1993 on the statistical units for the observation and analysis of the production system in the Community (OJ L 76, 30 March 1993)
3. Regulation (EU) 2019/2152 of the European parliament and of the council of 27 November 2019 on European business statistics, repealing 10 legal acts in the field of business statistics
4. European business statistics methodological manual for statistical business registers – 2021