4 Data issues and cross-country differences
As discussed, measurement issues are likely to affect the viability of cross-country comparisons of firm dynamics. These issues will be highlighted throughout the paper as comparisons are made. However, it is also worth discussing at the outset the key issues in data comparability between the three main data sources used in this paper (the New Zealand BDS, the OECD firm-level project, and the Eurostat). These data differences are summarised in Appendix Table 1.
4.1 Sector coverage
There are some differences in sectoral coverage across the different databases, although generally these do not appear to be substantial. As discussed above, the main sectors excluded from the New Zealand BDS are agriculture and community services. The sectors excluded from the OECD firm-level project vary depending on the country, but many of the analyses reported on in Bartelsman et al (2003) also exclude agriculture and community services.
One aspect of sector coverage that is likely to impact on cross-country comparisons is the Government administration/public service sector. In the OECD project, data for around half of the countries surveyed (namely Canada, Denmark, Finland, France, and the Netherlands) includes the public sector, while data for the remaining countries (Italy, Portugal, Germany and the USA) does not. We were not able to determine with certainty the sectoral coverage of the Eurostat database, however Brandt (2004) implies that the Eurostat data covers most if not all sectors of the economy.
Most of the analyses reported on for New Zealand in this paper include the public sector, as many of the obvious benchmark countries for New Zealand in the OECD project (eg, countries most similar to New Zealand in terms of economy/population size) also include the public sector in their data: for example, Denmark, Finland, Canada and the Netherlands. However, some additional data on firm size was obtained to test the effect of excluding the public sector on New Zealand’s firm size distribution, and to allow better comparisons with countries like Australia that only include firms from the private sector. Where relevant, the paper reports figures for firm size in the private sector only, either in addition to or instead of figures for the total economy.
4.2 Sample period
The three databases cover slightly different sample periods: mainly 1994-2001 for the NZ data obtained for this paper, mainly 1989-1994 for the OECD project, and 1997-2000 for the Eurostat data. To the extent that the variables in question differ over time, this may impact on the results to some (uncertain) extent. Wherever possible, the analyses in this paper use statistics for New Zealand that cover the same or similar time periods as those used in the comparator data. However, this was not possible in every case. Even where the same time periods are available, it should be kept in mind that different countries may be at different stages of the business cycle, which could affect the comparability of results.
4.3 Measure of employment
4.3.1 Employee vs total employment
Employment can be measured using either an “employee only” measure (where working proprietors are excluded from the count), or a “total employment” measure (where working proprietors are also counted as employees). Publicly available data from the New Zealand BDS generally use a “total employment” measure, but it is also possible to obtain figures just on employees. Both the OECD firm-level project and the Eurostat data generally use an employee only measure of employment.
4.3.2 FTE vs. headcount
Another issue in terms of employment is whether the measure used refers to the number of full-time equivalent employees (FTEs) or a simple headcount of all full and part-time employees. Publicly available data from the New Zealand BDS generally use an FTE measure of employment, although measures of full and part-time employees are also provided. In contrast, both the OECD firm project and the Eurostat use a straight headcount measure of employment.
4.4 Unit of analysis – plant versus enterprise
Data for firms in the New Zealand BDS are collected at both the plant (geographic unit) level and the enterprise level. Some previous New Zealand studies have used plant level data (eg Carroll et al, 2002) while others have used enterprise data. The data in both the OECD firm-level project and the Eurostat database are generally at the enterprise level.
