Multinational Enterprises – How important are they for the Danish Economy?

On Monday, Copenhagen Business School (CBS) released a new report documenting the importance of multinational enterprises to the Danish Economy. The report, which was funded by AmCham Denmark and co-authored by CBS Professors Jan Rose Skaksen and Torben Pedersen, was the foundation for a major two-page article in the Danish business daily Børsen.

The Danish economy is facing significant challenges, including a shrinking workforce and low growth in labor productivity, which have made Denmark poorer relative to other countries. This report explores the potential for multinational enterprises
(both foreign multinationals with subsidiaries in Denmark and Danish multinationals with subsidiaries abroad)
to improve these conditions – an area which has been more or less neglected in the Danish debate.

Key Findings:
All measures indicate that multinational enterprises play a significant role in the Danish economy.
Foreign-owned multinationals in Denmark generate nearly 20% of the total number of private sector jobs
and value added as well as 25% of Danish exports. Danish multinationals are also making substantial
investments abroad, including over 1,3 million employees, which is nearly equal to the total number of private
sector employees in Denmark.

However, there has been an increasing gap between inward and outward foreign direct investments (FDIs). Until 2003 the two were basically identical, but by 2009 the stock of outward FDIs is nearly 50 percent higher than the stock of inward. This gap between inward and outward FDIs is particularly large within the area of manufacturing.

Since foreign owned firms seem to be important for productivity and growth, the gap that has arisen between outward and inward FDIs is worrying. This indicates that Denmark has to reinvent its attractiveness – either by becoming again more attractive to manufacturing firms or by becoming more attractive in other industries.

To read the full CBS report, go to: 
Multinational Enterprises – How important are they for the Danish Economy?

To read the article (Danish) in Børsen, go to:
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