Firm Dynamics in New Zealand: A Comparative Analysis with OECD Countries (WP 04/11)

Abstract

Previous work has suggested that New Zealand’s firm dynamics and business demographics show a high proportion of small firms, small average firm size, and high rates of firm and employment turnover by comparison with other OECD countries. This paper reports on new comparative analyses of New Zealand’s firm dynamics and business demography that attempt to control for measurement differences, using data from Statistics New Zealand’s Business Demographic Statistics database, the OECD firm-level project, and the OECD’s analysis of the Eurostat database. The variables investigated include firm size, firm turnover (entry and exit) rates, employment turnover rates, firm survival rates, and firm growth. The findings suggest that once measurement differences are taken into account, overall New Zealand’s firm dynamics and demographics are broadly similar to many other OECD countries. Potential policy implications of these findings are discussed.

Acknowledgements

We would like to thank Geoff Lewis and Bob Buckle for their input on this paper.  Findings from the paper have also been presented to the NZ Association of Economists’ Conference and to the Workplace Productivity Working Group, and we are grateful for the comments received from participants and working group members.

Disclaimer

The views, opinions, findings, and conclusions or recommendations expressed in this Working Paper are strictly those of the author(s).  They do not necessarily reflect the views of the New Zealand Treasury.  The New Zealand Treasury takes no responsibility for any errors or omissions in, or for the correctness of, the information contained in this Working Paper.  The paper is presented not as policy, but to inform and stimulate wider debate.