International trade, foreign

direct investment and

global value chains

2017

GREECE
TRADE AND INVESTMENT STATISTICAL NOTE

International trade and foreign direct investment (FDI) are the main defining features and key drivers of global
value chains (GVCs). However, despite their strong complementarities, the two flows are typically presented
and treated separately in the statistical information system. Drawing on new and improved measures of trade
and investment, this country note provides relevant statistical information from OECD databases on trade,
investment, the activities of multinational enterprises (MNEs) and global value chains (TiVA). It sheds new
light on the trade-investment nexus by highlighting the interrelationships between trade and FDI, their
economic impact in the context of GVCs, and the role of MNEs as the main directors of these flows. The data
are as of 1 May 2017. More information and country notes are available at www.oecd.org/investment/trade-
investment-gvc.htm.

Over one-fifth (22% in 2014) of economic activity (GDP) in Greece depends on foreign markets, below
the OECD median and low compared to similar sized economies. Outward investment is slightly higher
than direct investment in Greece but they are almost balanced, and are comparatively low, equivalent to
approximately 15% of GDP in 2015. Inward investment in Greece supports just 5% of private sector jobs
and accounts for 11% of value added in the economy. A broader notion of international orientation, which
captures the impact on national impact of exports and sales through affiliates, shows that Greece’s
international orientation was equivalent to nearly one quarter (24%) of GDP in 2014.

Gross bilateral trade figures can disguise the true nature of trade interdependencies, particularly between
consumers in one country and producers at upstream parts of the value chain. For example, value added
export data identify that more Greek value added goes to the United Kingdom, Italy and France than
Turkey, and that China is a larger export destination than Bulgaria and Spain; these details are hidden
when using gross data. On the import side, the United States moves ahead of Italy as the third biggest
Greek supplier.

The top manufacturing exporting industries in Greece are coke and petroleum (PET), food and beverages
(FOD) and basic metals (MET). The food and beverages industry has relatively low export orientation,
import content of exports and value added by foreign-owned firms; in contrast, the chemicals industry has
one of the highest export orientations (44%) and one fifth of value added is produced by foreign-owned
firms. Greece has one of the highest services content in its exports at 64%, and this is correlated with a
relatively high share of its inward investment going to the services sector.

©OECD 2017 www.oecd.org/investment/trade-investment-gvc.htm

Trade and investment in Greece
Growth in trade remains below pre-crisis trends

Like many European economies, Greek trade contracted significantly at the height of the global crisis and
again during the euro crisis. Greek import growth was negative between 2008 and 2014; however, exports
fared better, with positive growth since 2010. In 2015, export growth was 3.4% while import growth was
just 0.3%.

Figure 1. Growth rates of trade and GDP for the OECD and Greece, 2001-2016
30
20
Growth Rates

10
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
-10
-20
Greece GDP OECD GDP Greece Exports
-30
OECD Exports Greece Imports OECD Imports

Source: OECD SNA

Gross exports amounted to USD 62 billion in 2015 (36% of GDP), and gross imports to USD 62 billion
(36% of GDP). Gross trade figures, however, overstate the ‘real’ contribution of trade to the economy. In
value-added terms, exports contributed 22% of total GDP in 2014, the highest recorded for the period, but
still below the OECD median (grey diamond). The contribution of direct and indirect imports to domestic
final demand measured 27% in 2014.

Figure 2. Trade in value added terms, imports and exports, 2001-2014

40%
35%
30%
25%
20%
15%
10%
5%
0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Imports (Foreign value added in domestic final demand)
Exports (Domestic value added in foreign final demand)
OECD Exports (Domestic value added in foreign final demand- median)

Source: OECD-WTO Trade in Value Added Data

Investment is slightly more outward than inward

Although they diverged over the period, Greek inward and outward investment positions are now similar at
14% and 16% (equivalent to) GDP. Both stocks have increased relative to GDP since 2008 (Figure 3). In
2015, Greece’s shares of both the OECD total inward and outward FDI stock (0.16%) were less than half
its share of GDP (0.37%) (Figure 4).

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 Figure 3. FDI stocks and income as a share of GDP Figure 4. FDI stocks and GDP as a
20 1.5 share of OECD total, 2015
1 0.40%
15 0.5
0.30%
% GDP

% GDP
0
10
-0.5 0.20%
5 -1
0.10%
-1.5
0 -2 0.00%
2008 2009 2010 2011 2012 2013 2014 2015 GDP Inward Outward
Inward FDI stock Outward FDI Stock
Income payments Income receipts
Source: OECD FDI Statistics (BMD4)
Source: OECD FDI Statistics (BMD4)

Foreign-owned firms directly sustained 5% of jobs in the private sector in 2013….

Reflecting the relatively small size of inward investment compared to other OECD economies,
foreign-owned enterprises accounted for just 5% of jobs in the private sector in 2013 and 11% of
private sector value added produced in Greece, excluding the agriculture and finance sectors.

…and are more export intensive than Figure 5. Export and import intensity of domestic
domestically owned firms and foreign-owned enterprises
30%
On average, foreign-owned firms in the OECD are 25%
more export intensive (share of exports in turnover) 20%
than domestically owned firms. The import 15%
intensity of foreign-owned firms (share of imports 10%
in purchases) is also typically higher for foreign- 5%
owned than domestic firms. These figures cannot 0%
be computed for Greece due to data limitations. OECD Median OECD Median
Export Intensity Import Intensity
Domestic-owned firms Foreign-owned firms

Source: OECD AMNE and Trade by Enterprise

Characteristics (TEC) statistics (2011)

Domestic MNEs provide important channels to penetrate foreign markets via affiliates…

In 2015, Greece received USD 2.3 billion in income from its outward investment, equivalent to
approximately 1.2% of GDP. Greece’s rate of return at 7.6% (green bar) on its outward FDI is above the
OECD median and has recovered since the crisis but is down on the 2014 value (see chart insert). On the
other hand, the return to foreign investors in Greece was 3.9% in 2015, below the median of OECD
countries.

Figure 6. Return on investment, income receipts and payments as a share of inward and
outward stocks, 2015
18%

13%

8%

3%

-2%
DEU
TUR

HUN
NZL

LVA
ITA

LUX

POL

CAN
SVN

BEL

AUS

GBR

DNK
SWE
EST

ESP
PRT

AUT
USA
SVK
NLD
NOR
ISL

GRC

CHE
CZE
FRA

FIN
IRL

CHL

Inward FDI return Outward FDI Return

Source: OECD FDI Statistics (BMD4)

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…and via exports Figure 7. Goods Exports by firm type, the role of MNEs
100%
Looking across a selection of European
80%

% Goods exports
economies, MNEs play a significant role in
GVC integration. In some countries it is 60%

through the activity of MNE parents, while for 40%

other it is foreign-owned firms. In each 20%
country with available data, at least half of all
0%
goods exports are conducted by MNEs.
AUT DNK FIN FRA HUN ITA POL PRT
Foreign-owned firms Domestic MNEs Domestic firms

Source: OECD TEC statistics (2011)

But Greece’s export orientation is low
relative to many similarly sized economies

Exports (in value added terms) contribute around 22% of Greek GDP. This is relatively low compared to
other small OECD economies, and comparable with Italy and Spain. It may in part reflect low levels of
inward investment contributing to low GVC integration as measured by the import content of exports.
However, export orientation has increased strongly since the crisis (see insert chart).

Figure 8. Export orientation, foreign affiliates value added and import content of exports, 2014
80%
70%
60%
50%
% GDP

40%
30%
20%
10%
0%

Domestic value added in foreign final demand (% of total domestic value added)
Value added produced by foreign controlled enterprsies (share of domestic total)
Foreign value aded in exports (% in exports)

Source: OECD-WTO Trade in Value Added Data and OECD AMNE statistics

Not all of the domestic value added content of exports sticks in the economy…

Gross export figures overstate the real economic impacts of trade to the exporting economy, but TiVA
estimates can also overstate these impacts as the profits earned by foreign-owned firms through exports are
repatriated if they are not reinvested. Figure 9 illustrates the importance of these flows across countries by
showing the value added in exports of domestically-owned firms (blue bar), wages paid by foreign-owned
firms (green bar), and profits of foreign-owned firms (grey bar), which in practice can be repatriated.
Excluding profits generated by foreign-owned firms, Greek exports contain 21% of value added that stays
in the economy. So, 4% of Greece’s exported domestic value added represents profits by foreign-owned
firms and 8% represents labour costs paid by these firms.

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 Figure 9. Exports by ownership and their contribution to income, as a share of GDP, 2014
80%
70%
60%
50%
% GDP

40%
30%
20%
10%
0%
LUX SVN CZE EST SVK HUN BEL AUT LVA NLD SWE NOR DEU DNK POL PRT FIN ESP ITA GRC FRA GBR USA

VA that could be repatriated Labour costs of foreign firms Value added by domestic firms

Source: OECD-WTO Trade in Value Added Data and OECD AMNE statistics

Taking a broader view by including the income of foreign affiliates can provide a more
complete picture of the international orientation of the Greek economy.

Firms serve foreign markets by exporting or by selling through their foreign affiliates. Figure 10 takes a
broader view of an economy’s international orientation by taking account of both trade and investment.
The chart begins with the domestic value added in exports that remains in the economy – exports of value
added by domestic firms (blue bar) and wages paid by foreign-owned firms associated with exporting
(grey bar) – and adds to it the profits that domestic MNEs receive from the activities of their foreign
affiliates as measured by FDI income receipts (light blue bar). The income payments made to foreign
parents are presented for information purposes (green bar). For Greece, this broader measure (24%) is
higher than the export orientation measure from TiVA (22%) because Greece is a net outward direct
investor.
Figure 10. Supplying markets through trade and investment: a broader perspective, 2014
90%

70%

50%
% GDP

30%

10%

-10% LUX SVN EST NLD CZE SWE HUN SVK BEL DNK AUT LVA NOR DEU PRT POL ESP FIN ITA GRC FRA GBR USA

-30%
VA repatriated to parent by affiliates Labour costs of foreign firms associated with exports
VA by domestic firms that serves foreign final demand VA repatriated to parent

Source: OECD-WTO Trade in Value Added Data, OECD AMNE and OECD FDI (BMD4) statistics

This broader perspective can also shed light on how foreign firms serve the domestic market

Foreign producers supply products and services for final consumption through trade (foreign value added
in domestic final demand) blue bar, and sales by foreign affiliates sold domestically (green and grey bar)
(Figure 11). Foreign production can be split between labour costs and profits, the profit component of
value added by foreign-owned firms can be repatriated to the parents. Due to limited data availability the
following chart cannot be reproduced for Greece, but it is likely that foreign firms serve the Greek market
more through trade than through investment reflecting the low inward investment in Greece.

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 Figure 11. How foreign firms serve your market: a value added perspective, 2014
70%
60%
50%
40%
30%
20%
10%
0%
EST LUX HUN LVA SVK SVN AUT POL SWE PRT FIN GBR DNK FRA NLD ITA USA
Share of profits in VA of foreign-owned firms (sold domestically)
Share of labour costs in VA by foreign-owned firms (sold domestically)
Trade: FVA in domestic final demand

Source: OECD-WTO Trade in Value Added Data, OECD AMNE and OECD TEC statistics

Trade and investment by partner country

Trade measured from a value added perspective better reflects the bilateral relationships

Gross bilateral trade figures can disguise the true nature of trade interdependencies, particularly between
final consumers in one country and producers at upstream parts of the value chain. For example, value
added export data identify that more Greek value added goes to the United Kingdom, Italy and France than
Turkey, and that China is a larger export destination than Cyprus*, Bulgaria and Spain; these details are
hidden when using gross data. On the import side, the United States moves ahead of Italy as the third
biggest Greek supplier.

Figure 12. Exports: gross and value added terms, Figure 13. Imports: gross and value added terms,
by partner country, 2014 by partner country, 2014
14 14

12 12
Partner share in total %

Partner share in total %

10 10
8 8
6 6
4 4
2 2
0 0
DEU USA GBR ITA FRA TUR CHN CYP BGR ESP RUS DEU USA ITA GBR CHN FRA SAU ESP NLD
Domestic value added exports Gross exports Value added imports Gross imports

Source: OECD-WTO TiVA Data Source: OECD-WTO TiVA Data

*
Note by Turkey: The information in this document with reference to “Cyprus” relates to the southern part of the Island. There is no single
authority representing both Turkish and Greek Cypriot people on the Island. Turkey recognises the Turkish Republic of Northern Cyprus
(TRNC). Until a lasting and equitable solution is found within the context of the United Nations, Turkey shall preserve its position
concerning the “Cyprus issue”.
Note by all the European Union Member States of the OECD and the European Union: The Republic of Cyprus is recognised by all
members of the United Nations with the exception of Turkey. The information in this document relates to the area under the effective control
of the Government of the Republic of Cyprus.

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Figure 14, supplying the domestic market through trade and investment, cannot be produced for Greece
due to data availability.

Trade and investment by industry

The top manufacturing exporting industries in Greece are Coke, refined petroleum products and nuclear
fuel (PET), food and beverages (FOD) and basic metals (MET). The import content of exports varies
across industriesillustrating the role that importing play can in supporting exports and the degree of GVC
integration in these industries.

Figure 15. Top exporting manufacturing industries in Greece, 2014

40% 80%
Share in manufcaturing total

35% 70%
30% 60%
25% 50%
20% 40%
15% 30%
10% 20%
5% 10%
0% 0%
PET FOD MET CHM TEX ELQ FBM RBP MEQ NMM
Exports Imports Import content of exports (RHS)
Source: OECD-WTO Trade in Value Added Data and OECD AMNE statistics. See page 10 for a description of industry codes.

Exports and imports can go hand in hand…

Across OECD countries and industries there is often a strong positive correlation between higher import
content of exports and a higher share of their domestic value-added being exported (export orientation)
illustrating the strong complementarity of exports and imports. This is less the case for Greece (Figure 16),
possibly reflecting the low export orientation and low import content of exports of many industries.

Figure 16. Import content of exports and export Figure 17. Value added of foreign-owned firms and
orientation, 2014 export orientation, 2014
50 CHM 45 ELQ
PET
Share of value added by foreign-

45 40
40 35
Export Orientation

35
MEQCEQ 30
owne firms

30 FOD NMM CHM

MTRELQ 25
25 TEX RBP RBP
20 PAP FOD MEQ
20 PAP OTM CEQ
15 NMM 15
10 10
5 5
0 0
0 10 20 30 40 50 0 10 20 30 40 50
Import content of exports Export Orientation

Source: OECD-WTO TiVA Data and OECD AMNE statistics Source: OECD-WTO TiVA Data and OECD AMNE statistics

...and investment and export orientation can also go hand in hand

At the same time, strong complementarities can exist between inward investment and export orientation
(Figure 17). This is also less evident for Greece than for other OECD countries, possibly reflecting the

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low inward investment in the country and the overall low export orientation of the economy. Figure 18,
goods trade by ownership and industry, cannot be produced for Greece due to data limitations.

Service industries play an important role in the export orientation of an economy…

Typically, services account for a large share of the value added in the economy but conventional gross
trade statistics understate this as they cannot reveal the contribution that the upstream services industry
plays in the production of goods exports. Accounting for this contribution, the services content of Greece’s
total exports of goods and services was 64% in 2014 (Figure 19), above the OECD median of 57%.
Considering the services content of manufactured goods alone, one-third of manufacturing exports reflects
services value added, below the OECD average of 36%.

Figure 19. Services content of gross exports for OECD countries, 2014
100

80

60

40

20

0
KOR

DEU

HUN
MEX

CAN

JPN

TUR

ITA
POL

NZL

LVA

LUX
NOR

CZE

SWE
SVK

AUS

SVN

USA

ESP

GRC
GBR
BEL
AUT

EST
PRT

FRA

DNK
CHL

FIN

ISR
ISL

IRL
CHE
Foreign Services VA content in Exports Total Domestic Services VA in Exports

Source: OECD-WTO TiVA Data

Figure 20. Share of services industries in foreign-

…and so inward FDI in the services sector owned firms’ value added and domestic services
can be an important channel for export value added share of gross exports, OECD countries,
2014
success
60%
Domestic services value added

GBR
Greater foreign investment in the services BELFRA GRC
50% DNK ESPLVA
share of gross exports

EST ITA AUT

sector is associated with higher services PRT
40% POL DEU FIN SWENLDLUX
content in exports. For Greece, the share of SVN
30% NOR
investment in services is at the higher end for SVK HUN
CZE
OECD economies which could contribute to 20%

its relatively high services content in exports. 10%

0%
0% 20% 40% 60% 80% 100%
Share of services industries in foreign-owned firms
value added

Source: OECD-WTO TiVA Data and OECD AMNE statistics

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Links and data sources
Guide to the trade and investment statistical notes
www.oecd.org/investment/Guide-trade-investment-statistical-country-notes.pdf
Activity of Multinational Enterprises - AMNE www.oecd.org/sti/ind/amne.htm
OECD Benchmark Definition of Foreign Direct Investment - 4th Edition (BMD4)
(see Chapter 8 for information on the intersection of AMNE and FDI data)
www.oecd.org/investment/fdibenchmarkdefinition.htm
Foreign Direct Investment (FDI) Statistics www.oecd.org/investment/statistics.htm
Trade by Enterprise Characteristics - TEC
www.oecd.org/std/its/trade-by-enterprise-characteristics.htm
Trade in Value Added - TiVA
www.oecd.org/sti/ind/measuringtradeinvalue-addedanoecd-wtojointinitiative.htm

Annex: Further data requirements

To make this note as informative as those of other OECD members, more detailed data about Greek trade
and investment are needed. Data on trade by enterprise characteristics (TEC) would benefit the analysis.
Trade of goods broken down by whether the enterprise is foreign or domestically-owned, and within
domestic firms the split between domestic MNEs and domestic non-MNEs also helps analyse the
importance of domestic industry and how that can facilitate GVC integration. The availability of these data
would enable the production of Figures 5, 7, 11, 14 and 18.

9
Table of industry codes

Industry Type Ind Code Industry Description

AGR Agriculture, hunting, forestry and fishing

Primary Industries
MIN Mining and quarrying

FOD Food products, beverages and tobacco

TEX Textiles, textile products, leather and footwear
WOD Wood and products of wood and cork
PAP Pulp, paper, paper products, printing and publishing
PET Coke, refined petroleum products and nuclear fuel
CHM Chemicals and chemical products
RBP Rubber and plastics products
NMM Other non-metallic mineral products
Manufacturing
MET Basic metals
FBM Fabricated metal products except machinery and equipment
MEQ Machinery and equipment n.e.c
CEQ Computer, electronic and optical products
ELQ Electrical machinery and apparatus n.e.c
MTR Motor vehicles, trailers and semi-trailers
TRQ Other transport equipment
OTM Manufacturing n.e.c; recycling
EGW Electricity, gas and water supply
CON Construction
WRT Wholesale and retail trade; repairs
HTR Hotels and restaurants
TRN Transport and storage
PTL Post and telecommunications
FIN Finance and insurance
REA Real estate activities
Services
RMQ Renting of machinery and equipment
ITS Computer and related activities
BZS Research and development & Other Business Activities
GOV Public admin. and defence; compulsory social security
EDU Education
HTH Health and social work
OTS Other community, social and personal services
PVH Private households with employed persons

© OECD 2017. This note is published under the responsibility of the Secretary-General of the OECD. The opinions
expressed and the arguments employed herein do not necessarily reflect the official views of OECD member
countries. This document and any map included herein are without prejudice to the status of or sovereignty over
any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or
area. Please cite this note as: OECD (2017), Greece: Trade and Investment Statistical Note.

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