I'm working o a model where corporate revenue / world GDP is a dependent variable of some stuff (based on the model proposed in this paper: http://www.scielo.br/scielo.php?pid=S1807-76922009000200002&script=sci_abstract)

Thing is, I'm not an Economist, so I'm not sure exactly which measures of GDP to use.

On the World Bank website there are four GDP measures: Constant 2010 USD, Current USD, Constant LCU and current LCU.

The companies operate in different currencies and are multinationals, so I was thinking about converting revenues to USD by each year's exchange rate (as recorded by OECD) and dividing it by Current USD GDP values provided by the World Bank.

Does this make sense?

The other way I was thinking is taking constant 2010 USD GDP and inflate/deflate revenues based on CPI Growth (as recorded by OECD) for each currency used in the consolidated income statements of the companies (some companies use Euros and others Yen).

Which one of these would make more sense? If neither one, how would you do it?

  • $\begingroup$ To compare number within the same year, I think nominal currency converted to USD over current USD world GDP makes sense, as it says how much of the world GDP was created by that company. But you might wanna think also about double-counting. Imagine there's company A and B. A sells a widget to B for \$10, and B does something with it and sells it for \$15. Suppose these are the only two companies in the world. Using revenue approach, this would say that B contributes 100% of world GDP, and A contributes 67%. $\endgroup$ – Art Jun 30 '19 at 1:07
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    $\begingroup$ Perhaps you could also explain how you're going to use this variable and give more context. (E.g. what questions are you investigating?) That would help those trying to answer your question. $\endgroup$ – Kenny LJ Jun 30 '19 at 2:00

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