3 INSTITUTIONAL CLASSIFICATION

3.4.3. Other institutional sub-classifications

Type of institution

177.The evolving nature of the business sector both within countries and worldwide requires subdividing both private and public enterprises.

178.If private enterprises are broken down between independent enterprises and enterprises belonging to a group and between national and foreign groups, some trends in the internationalisation of industry can be examined.

179.It is recommended, therefore, that the following classification by type of institution be used if possible:

–Private enterprises:

Enterprise not belonging to any group.

Enterprise belonging to a national group.

Enterprise belonging to a foreign multinational group.

–Public enterprises:

Enterprise not belonging to any group.

Enterprise belonging to a national group.

–Other research and co-operative institutes.

180. Public enterprises are distinguished from private enterprises on the basis of control. The SNA 93 (paragraph 4.72) makes the following recommendation for the definition of public non-financial corporations:

“These consist of resident non-financial corporations and quasicorporations that are subject to control by government units, control over a corporation being defined as the ability to determine general corporate policy by choosing appropriate directors, if necessary. The government may secure control over a corporation:

–by owning more than half the voting shares or otherwise controlling more than half the shareholders’ voting power; or

–as a result of special legislation, decree or regulation which empowers the government to determine corporate policy or to appoint the directors.”

181.A group must be considered as foreign when the main shareholder is a foreign resident with more than 50% ownership and voting power, either directly or indirectly through subsidiaries. For more information, see the OECD

Manual of Economic Globalisation Indicators (provisional title, forthcoming).

Size of institution

182. Size generally affects the extent and nature of the R&D programmes of entities in the business enterprise sector. Size may be classified on the basis of