The impact of offshore profit shifting on the measurement of GDP: the case of the UK. Further analysis

In this paper, we present additional figures and results with respect to Mion and Tong (2021) using an extended sample. More specifically, in Mion and Tong (2021) we focused on MNEs with at least one affiliate located in the UK while imposing a 50 per cent ownership threshold in each step of an ownership chain to assign membership of a firm to an MNE group. Using the language of the IMF Balance of Payments and International Investment Position Manual (Version 6), we thus considered only MNEs' subsidiaries while leaving associate relationships, i.e., relationships involving in between 10 per cent and 50 per cent of ownership, aside. In extending the analysis to associate relationships, we find that the net position of the UK in terms of those who gained or did not gain from our profit shifting exercise is largely unaffected in both 2007 and 2017. At the same time, the number of associate relationships is small compared to the number of subsidiary relationships in our data. In terms of the quantitative importance of associate relationships, for example in terms of share of overall revenues and profits within an MNE group, the situation is very different in 2007 compared to 2017. While back in 2007 associate relationships were quite sizeable in terms of overall MNE group revenues and profits, by 2017 their quantitative importance had become negligible.