Quarterly Survey of Overseas Subsidiaries

Outline of Survey and Guidelines for Utilizing the Survey Findings

• 1. Outline of Survey
• 2. Guidelines for Utilizing the Survey Findings
• 3. Symbols in the Statistical Tables
• 4. Method of determining figures
• 5. Response

1. Outline of Survey

(1) Objectives

The objectives of the current survey were to dynamically grasp the business performances of Japanese incorporated enterprises engaged extensively in the business operations domestically and overseas, and to obtain the materials and data useful for the government to formulate its industrial policies and trade policies.

(2) Legal foundations for the survey

This survey was legally endorsed and authenticated by the Article 4 of the Statistical Report Adjustment Law. Prior to the commencement of this survey, a pilot or test survey was consecutively conducted in the October-December quarter of 1996 and in the January-March quarter of 1997. The findings obtained from those pilot surveys will also be published together with this survey findings after approval from the General Affairs Administration Agency.

(3) Coverage of survey

(a) Parent companies

As of the end of March of 1997, the respondent companies were chosen as the parent companies from among the Japanese manufacturing enterprises incorporated under the Japanese laws on condition:

1. Have more than 50 employees
2. Are capitalized at more than 30,000,000 yen
3. Own overseas incorporated enterprises as subsidiaries
4. Have formerly been authorized to acquire bonds and securities in foreign currencies under the Foreign Exchange and Trade Control Act.

(b) overseas subsidiaries

The qualifications and conditions for overseas subsidiaries to be chosen as respondent companies were defined as follows:

1. A locally-based overseas subsidiaries is under the ownership of a domestically-based parent company that satisfies the above-mentioned conditions.
2. A parent company holds a more than 50% of ownership of an subsidiary in terms of capital-investment ratio on a combined basis of direct investment and indirect investment by a parent company.
3. An subsidiary employs more than 50 employees as a manufacturer.
4. An subsidiary if it is established during the survey period may be included.

(4) Survey method

A survey by mail was employed as the survey method . based on a self-administered questionnaire filled out by a parent company chosen as the respondent.

(5) Data tabulation method

The data obtained were tabulated into those output by parent companies and those output by subsidiaries separately. What were not provided at the time of tabulation were estimated by the following formula:

Current estimated data for the company that failed to provide the relevant data = The previously provided data of the said company * The currently provided data consolidated with the data from the companies that provided data both in the current survey and in the previous survey

The previously provided data consolidated with the data from the companies that provided data both in the current survey and in the previous survey

What were included into data estimation were as follows:

Parent companies

Sales, exports, exports to overseas subsidiaries, Purchases, imports, imports from overseas subsidiaries, number of employees

overseas subsidiaries

Sales, sales to Japan, local sales, number of employees

(6) Classification of business category

In principle, according to the Japan Standard Industrial Classification, the category of business that has the largest share of the sales was recognized as the major business of each parent company as well as each subsidiary.

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2. Guidelines for Utilizing the Survey Findings

(1) Fixation of samples within the fiscal year

Based on the survey results as of the year end, the companies targeted for this survey were fixed as a total sample during the following year. As for overseas subsidiaries, the newly-established companies as well as retreated companies during the current survey period were also included into the data tabulation in each quarter.

(2) Currency conversion

Local currencies if used for entry of figures into the columns for amounts in the questionnaire were converted into Japanese currency at the mid-term mean exchange rate in the survey period published by IMF. The average exchange rate for the quarter in question was 125.24 yen to the US dollar, or 7.31 yen less than in the previous quarter (117.93 yen).

(3) Exports and imports

The amounts of exports and imports that completed the customs clearance under the company's own name were identified as the authentic exports and imports to be explored.

(4) Acquisition of tangible fixed assets

The acquisition-completed or acquired tangible fixed assets during the current survey period were identified as the facility investment qualified for exploration.

(5) Direct overseas investment

The direct overseas investment portfolio reported to the Bank of Japan during the current survey period were identified and targeted for exploration.

(6) Number of employees

Paid officials, executives and directors were included into the number of employees.

(7) Territories

The details of the territories encompassed by the current survey were as follows:

North America:

America, Canada

Asia:

ASEAN 4

Indonesia, Thailand, Philippines, Malaysia

NIES 3

Singapore, Taiwan, Republic of Korea

China and other Asian countries

India, Viet Num, Cambodia, Sri Lanka, Nnepal, Pakistan, Bangladesh, Brunei, Myanmar, Laos, People's Republic of China (including Hong Kong)

Europe

Iceland, Ireland, Azerbaijan, Armenia, United Kingdom, Italy, Ukraine, Uzbekistan, Estonia, Austria, Netherlands, Kazakhstan, Greece, Kyrgyzstan, Georgia (Gruziya), Cyprus, Switzerland, Spain, Tadzyhikstan, Denmark, Germany, Turkmenistan, Turkey, Norway, Hungary, Finland, France, Belarus, Belgium, Poland, Portugal, Malta, Mordavia, Latvia, Lithuania, Rumania, Luxembourg, Russia

Other

Other than North America, Asia and Europe

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3. Symbols in the Statistical Tables

[ X ]	shows that the figures are hidden for protecting the confidentiality of the individual reporters because the number of a parent company that owns the overseas subsidiary in question related to the hidden figures was either 1 or 2.
[ p ]	indicates a provisional figure that may change in the following quarter.
[ - ]	denotes the areas not applied nor explored.
[ r ]	denotes what were changed from the previously published data.

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4. Method of determining figures

(1) Determination of quarterly figures

The figures for a given quarter are determined in the following quarter.

(2) Determination of annual figures

Figures are determined as described in (1), in the quarter (April-June) following the last quarter of the fiscal year (Jan-March). Figures published in the Jan-March quarter are accompanied by "p".

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5. Response

The response for the collection of questionnaires were as follows:

Classification	Number of respondents	Response rate
Parent company	1153	62.66%
Overseas Subsidiary	2406	60.1%

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