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08/04: A Comparison of Qualitative and Quantitative Firm Performance Measures


[ Last Updated 2 April 2008 ]
Short Description This paper compares information on firm performance, reported in the Business Operations Survey, with alternative measures taken from administrative sources, brought together n the prototype Longitudinal Business Database.

Author Richard Fabling (Reserve Bank of New Zealand), Arthur Grimes (Motu Economic & Public Policy Research), Philip Stevens (Ministry of Economic Development)

May 2008

  • ISBN: 978-0-478-31667-4 (HTML)
  • ISBN: 978-0-478-31659-9 (PDF)

Abstract

Many analyses of firm performance are based upon self-reported measures. However, not only are these likely to be more subject to general reporting error than alternative official sources, but also measures of relative performance may be subject to the biases observed in the psychology literature. In this paper we consider both absolute and relative performance, reported in the Business Operations Survey (BOS), with alternative measures taken from administrative sources, brought together under the Improved Business Understanding via Longitudinal Database Development (IBULDD) project in the prototype Longitudinal Business Database (LBD).

Our results suggest that there is much commonality in the picture we see using either administrative (tax) or quantitative survey data, giving us some comfort that the tax data, while not collected for statistical purposes, serves as well as a tool for measuring firm performance. However, there are many differences also, in particular when we consider reported profits.

JEL Classification: C80; C81; D24; L25

Keywords: Micro data; subjective data; firm performance; labour productivity

Contact: Occasionalpapers@med.govt.nz




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