BE-577 B-Collection of Information_DID final

Supporting Statement for the BE-577,
Quarterly Survey of U.S. Direct Investment Abroad—
Transactions of U.S. Reporter with Foreign Affiliate
OMB Control Number 0608-0004
B. Collections of Information Employing Statistical Methods
1. Describe (including a numerical estimate) the potential respondent universe and any
sampling or other respondent selection method to be used. Data on the number of entities
(e.g. establishments, state and local governmental units, households, or persons) in the
universe and the corresponding sample are to be provided in tabular form. The tabulation
must also include expected response rates for the collection as a whole. If the collection has
been conducted before, provide the actual response rate achieved.
The potential universe for the BE-577 survey consists of all foreign business enterprises, except
for certain private funds, in which a U.S. person owns or controls, directly or indirectly, 10
percent or more of the voting securities if an incorporated business enterprise, or an equivalent
interest if an unincorporated business enterprise (foreign affiliate). The 2014 benchmark survey
data have not been finalized, however historically the benchmark surveys increase the size of the
universe. Therefore, we estimate the universe to consist of approximately 4,560 U.S. parents
with 64,800 foreign affiliates, which represents a 20 percent increase over the 2013 universe.
Sample selection for foreign affiliates reported in the quarterly survey is based primarily on the
size of the foreign affiliate. The size thresholds are stated in terms of total assets, annual sales or
gross operating revenues, and annual net income (loss) after income taxes. A U.S. Reporter must
file a BE-577 form for each directly-owned foreign affiliate for which any one of the three items
for the affiliate (not the U.S. parent’s share) was greater than $60 million (positive or negative) at
any time during the affiliate’s fiscal year. Additionally, reports must be filed for each indirectlyowned foreign affiliate that meets the $60 million threshold and had an intercompany balance
exceeding $1 million with its U.S. Reporter during the reporting period.
As shown in the table below, the BE-577 survey covers about 26 percent of the number of
foreign affiliates in the potential universe. BE-577 respondents account for a much larger
percentage of the potential universe in terms of value than in terms of numbers, i.e., while the
foreign affiliates reportable on the BE-577 account for only 26 percent of the number of all
affiliates, they account for about 97 percent of the total investment position of all affiliates in the
universe.
BE-577 Universe, Sample, and Response Rate
Number of foreign
affiliates
Universe
64,800
Sample
16,720
Nonsample
48,080
Response rate 1

1

Percent of foreign
affiliates
100.0%
25.8%
74.2%
91.0%

Response rate refers to the foreign affiliates within the sample.

Percent of
investment position
100.0%
97.2%
2.8%
94.2%

Based on response rates from recent quarterly surveys, reports received in time for final
estimates accounted for 94 percent of the investment position and 91 percent of the number of
foreign affiliates in the sample frame.
2. Describe the procedures for the collection, including: the statistical methodology for
stratification and sample selection; the estimation procedure; the degree of accuracy
needed for the purpose described in the justification; any unusual problems requiring
specialized sampling procedures; and any use of periodic (less frequent than annual) data
collection cycles to reduce burden.
The information is collected according to documented procedures in a manner that reflects
standard practices accepted by the relevant economic/statistical communities. BEA conducts a
thorough review of the survey input data using sound statistical techniques to ensure the data
quality before the final estimates are released. The data are collected and reviewed according to
documented procedures and best practices and on-going review by the appropriate supervisor.
The data are validated using computerized edit checks to detect potential errors and to ensure
that the data are accurate, reliable, and relevant for the estimates being made. Data are revised
routinely as more complete source data become available. The collection and use of this
information complies with all applicable information quality guidelines, i.e., those of OMB, the
Department of Commerce, and the Bureau of Economic Analysis.
Data for the nonsample portion of the universe as well as for delinquent respondents will be
statistically estimated and added to the data of the reported sample entities to provide universe
estimates. The estimates are derived by extrapolating forward data collected in the most recent
benchmark survey or other prior reports, and growth in data reported by a matched sample of
foreign affiliates that reported both in the current quarter and in the prior quarter. Thus, the
estimates cover the universe of transactions and positions between U.S. parents and their foreign
affiliates.
A high degree of accuracy is needed for the purposes stated in the justification.
No unusual problems have been encountered that would require the use of specialized sampling
procedures.
3. Describe the methods used to maximize response rates and to deal with nonresponse.
The accuracy and reliability of the information collected must be shown to be adequate for
the intended uses. For collections based on sampling, a special justification must be
provided if they will not yield "reliable" data that can be generalized to the universe
studied.
To maximize response rates for the few respondents filing on paper forms, each BE-577 form is
preprinted with the name of the foreign affiliate and other pertinent information. For respondents
filing electronically, a letter is sent notifying them that their quarterly report is due, and BEA
provides respondents with a list of foreign affiliates for which data are required. Any person
specifically contacted by BEA must respond by filing either the completed form or a valid claim
for exemption. Nonrespondents will be sent follow-up notices and, in the event of continued
nonresponse, may be referred to the Office of the General Counsel for further action.

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The response rates provided in B.1. are high enough to ensure that non-response bias is
negligible. The high response rates together with the estimation procedures described in B.2.
provide information of sufficient accuracy and reliability for the intended purposes.
4. Describe any tests of procedures or methods to be undertaken. Tests are encouraged as
effective means to refine collections, but if ten or more test respondents are involved OMB
must give prior approval.
No tests were conducted.
5. Provide the name and telephone number of individuals consulted on the statistical
aspects of the design, and the name of the agency unit, contractor(s), grantee(s), or other
person(s) who will actually collect and/or analyze the information for the agency.
The survey is designed and conducted within BEA by the Direct Investment Division (DID). For
further information, contact Patricia Abaroa, Chief, DID, via email at [email protected],
or by phone at 301-278-9591.

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