Offshore investment by Australian firms: Survey evidence

Commission research paper

This paper was released on 26 February 2002. The paper presents the findings of a new survey by the Commission on what motivates Australian firms to operate or relocate their headquarters offshore, and the implications for Australia. It updates and extends a similar survey conducted in 1995 for the Industry Commission’s inquiry into the implications for Australia of firms locating offshore.

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Media release
Contents

The establishment by Australian firms of operations overseas typically complements their domestic activities, according to a research paper released today by the Productivity Commission.

The Commission research paper — Offshore Investment by Australian Firms: Survey Evidence — presents the findings of a new survey by the Commission on what motivates Australian firms to operate or relocate their headquarters offshore, and the implications for Australia. (It updates and extends a similar survey conducted in 1995 for the Commission's inquiry into the Implications for Australia of Firms Locating Offshore.)

Commission Chairman, Gary Banks said 'The survey demonstrates that the commercial imperative of getting close to the customer is still the main driver of offshore investment. Governmental influences are of secondary importance, with tax being the most significant'.

The survey confirms that relatively few firms are relocating their headquarters offshore. The main influences on relocation decisions were improved access to overseas markets and proximity to foreign equity interests. The Australian taxation regime was the next most important influence, outweighing other government-related factors.

Preliminaries
Cover, Copyright, Foreword, Contents, Acknowledgments, Abbreviations, Overview

1 Introduction
1.1 Background to the study
1.2 Concerns about offshore investment
1.3 Structure of the report

2 Trends in foreign direct investment
2.1 Global developments
2.2 Australian trends in FDI
2.3 Australia's investment experience in context
2.4 Summing up

3 Survey findings
3.1 Firms involved in offshore investment
3.2 Nature and location of offshore production
3.3 Factors influencing direct investment offshore
3.4 Effects of offshore investment
3.5 Headquarters relocation
3.6 Importance of the Australian regulatory environment to domestic growth
3.7 Summing up

A The Commission's survey

B Survey questionnaire

C Detailed survey tables

References