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AOM PDW: Longitudinal Data for Entrepreneurship Research

Program Session #: 327 | Submission: 15780 | Sponsor(s): (ENT, RM)
Scheduled: Saturday, Aug 7 2010 2:45PM - 4:45PM at Le Palais Des Congres in 513F

The workshop would be of interest to anyone doing empirical research on business dynamics and entrepreneurship.

This Professional Development Workshop will consist of presentations by several academic and government researchers on a number of datasets that can be used in entrepreneurship, time for Q&A, and a dialogue among participants and presenters about these data, including: availability, access, strengths, weaknesses, merging of different data, and funding for entrepreneurship research.

Business dynamics is a central feature of market economies with broad impacts on labor markets, technical progress and economic growth. The process of Schumpeterian creative destruction is at the heart of the innovative process and productivity growth in modern market economies. Businesses and organizations that develop and/or adopt new and improved products, services and processes grow and displace those that don't. Recent research suggests a substantial fraction of productivity growth is accounted for by the shifting of outputs and inputs away from less productive to more productive businesses as part of this ongoing creative destruction process. However, in spite of the potential importance measures of business dynamics are relative newcomers in official economic measurement and have not yet been fully integrated into the broader measurement framework.  A recent report from the National Academies highlights the need for tracking business formation as well as tracking business dynamics in the first several years post entry. A key recommendation of this report is that the U.S. statistical agencies develop their administrative data to improve our understanding of business dynamics including releasing public domain statistics on economic activity by business age.

Overview:

Business dynamics is a central feature of market economies with broad impacts on labor markets, technical progress and economic growth. The process of Schumpeterian creative destruction is at the heart of the innovative process and productivity growth in modern market economies. Businesses and organizations that develop and/or adopt new and improved products, services and processes grow and displace those that don't. Recent research suggests a substantial fraction of productivity growth is accounted for by the shifting of outputs and inputs away from less productive to more productive businesses as part of this ongoing creative destruction process. However, in spite of the potential importance measures of business dynamics are relative newcomers in official economic measurement and have not yet been fully integrated into the broader measurement framework.  A recent report from the National Academies highlights the need for tracking business formation as well as tracking business dynamics in the first several years post entry. A key recommendation of this report is that the U.S. statistical agencies develop their administrative data to improve our understanding of business dynamics including releasing public domain statistics on economic activity by business age.

The primary objectives of this PDW are:

• To educate researchers on the availability of data for entrepreneurship research
• To encourage discussion on steps to improve data collection efforts, both governmental and private, for entrepreneurship research
• To provide a broad perspective on the importance of governmental and private data in serving research needs and driving better policy
• To highlight that while more entrepreneurship and innovation data are becoming available for research, improvements are still needed

Overviews of several longitudinal datasets will be made by academic and government researchers.  After a brief Q&A, we will facilitate an active discussion among participants and presenters.

Some of the presenters include:

E.J. Reedy, Kauffman Foundation (Chair)

E.J. will present an overview of a new longitudinal survey sponsored by the Kauffman Foundation.  To fill a void in data collection on young businesses in the United States and to catalyze new understandings of how various factors influence entrepreneurial outcomes, the Kauffman Foundation created the Kauffman Firm Survey (KFS)-the largest longitudinal survey of new businesses in the world (4,928).  The KFS started with a cohort of nearly 5,000 firms that began operations in 2004. This cohort is tracked annually and asked an extensive set of detailed questions that cover a range of topics such as the background of the founders, the sources and amounts of financing, firm strategies and innovations, and outcomes such as sales, profits, and survival.  The KFS is currently in its sixth collection period with data available for analysis by scholars on the first five years of operations covering calendar year 2004-2008 business activities.

Ron Jarmin, Center for Economic Studies, U.S. Census Bureau

Javier will describe a new business dynamics data product from the U.S. Bureau of the Census – the Business Dynamics Statistics (BDS). The BDS provides rich new data products on business dynamics including in this initial release measures of business dynamics at the economy-wide, broad industry, state, business size and age levels of aggregation. In the late 1990s, the Census Bureau's Center for Economic Studies (CES) began development of an economy-wide establishment-level longitudinal database for use in economic research. The development of the Longitudinal Business Database (LBD) was a natural follow-up to its very successful predecessor, the Longitudinal Research Database (LRD).  Constructed from respondent-level information in the Annual Survey of Manufactures and the Census of Manufactures, the LRD contained a wealth of information on the activities of manufacturing establishments over time. It was, however, limited to the manufacturing sector.  The development of the LBD was spurred by the need to see if results obtained with the LRD applied to other sectors of the economy, and by the fact that manufacturing's importance as a source of jobs in the economy was decreasing.  By utilizing stored "snapshot" files of the Census Bureau Business Register (formerly known as the Standard Statistical Establishment List or SSEL), Jarmin and Miranda were able to construct a longitudinal establishment level dataset for the private non-farm economy from 1975 to 1999. Subsequent updates have extended coverage through 2005. This has generated substantial interest in public use tabulations from the LBD. The data infrastructure has now been sufficiently developed to update the LBD on an ongoing basis with the objective to remain as timely as possible. The BDS data products include measures of establishment and firm births and deaths, job creation and destruction by firm size, firm age, and industrial sector, and several other statistics on business dynamics. The BDS has some elements that are similar with the Bureau of Labor Statistics (BLS) Business Employment Dynamics (BED) and the Census Bureau's Statistics on U.S. Business (SUSB) programs. However, the BDS tabulations focus more on business formation and business age dynamics taking advantage of the unique aspects of the LBD. A key advantage of the LBD is that business dynamics at both the firm and establishment-level can be tracked, measured and analyzed. Another related feature is that the BDS provides the first publicly available tabulations of job creation by business size and age. There is a longstanding interest in the contribution of small businesses to job and productivity growth in the U.S.

Brian Headd, Office of Economic Research, Office of Advocacy, U.S. SBA

Brian will present an overview of data available through the website of the Small Business Administrations's Office of Advoacy, which are compiled from the business size data available from the Census Bureau, such as the Statistics of U.S. Businesses, Survey of Business Owners and the Bureau of Labor Statistics, such as the Current Population Survey. 

David will give an overview of the Business Employment Dynamics.  The BED data are compiled by the U.S. Bureau of Labor Statistics from the Quarterly Census of Employment and Wages (QCEW), or ES-202 program.  This program is a quarterly census of all establishments under State unemployment insurance programs, representing about 98 percent of employment on nonfarm payrolls, including all levels of government. These records are linked across quarters to provide a longitudinal history for each establishment. The linkage process allows the tracking of net employment changes at the establishment level, which in turn allows the computation of gross jobs gained at opening and expanding establishments and gross jobs lost at closing and contracting establishments. The quarterly Business Employment Dynamics statistics, released with only an 8 month lag track changes in job creation and destruction at the establishment level and firm level, revealing the dynamics underlying net changes in employment. These data include the number and rates of gross jobs gained at opening and expanding establishments, as well as the number and rates of gross jobs lost by closing and contracting establishments.  The array of BED data includes quarterly establishment by firm size, NAICS industry data, as well as state totals. In addition, data on the number of births and deaths is available for the national and states. Finally, data on annual gross job gains and losses is available so the U.S. can be compared with similar data available internationally. 

Jon Eckhardt, University of Wisconsin

Jon will present an overview of a unique dataset that was developed from the competitive interaction of over 10,000 free and commercial programs-termed MobileApps-that were written for the Palm Handheld Computer and Smartphone. These MobileApps were distributed online on an AppStore in over 200 newly forming distinct high-technology markets for the Palm Platform which spawned over one million transactions. In the period of the study, considerable uncertainty existed regarding technological feasibility, features that consumers might be interested in, and the extent of consumer demand. They treat MobileApps that can be downloaded and used without paying a fee as free public technologies, and treat MobileApps that must be purchased to be used as commercial technologies. They examine the relationship between the public availability of free technologies and the sales of commercial MobileApps, as well as the relationship between the prevalence of commercial MobileApps and the adoption of specific free technologies.

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Alicia M. Robb, Ph.D

Senior Research Fellow, Kauffman Foundation

Senior Economist, Beacon Economics

415.259.9009

arobb@kauffman.org