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Time series for main variables on the performance of Dutch SMEs

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  • Ton Kwaak
  • Werner Liebregts

Abstract

National Accounts provide detailed information on the development of the economy detailed by sector of industry. However, a disaggregation by enterprise size class is not available. The available data on the size class structure of the economy shows huge and unrealistic fluctuations and can therefore not directly be used to disaggregate the information from National Accounts. This paper reviews some methods to smooth developments shown in source data with respect to the share of small, medium-sized and large enterprises. It appears that in principle, the Hodrick-Prescott filter is most suited to fulfill this task. A modified Hodrick-Prescott filter is used. In particular, the simultaneous smoothing of interrelated series, taking into account the definitional relations existing between them, performs quite well. The methodology has been tested for two rather different sectors of industry, i.e. chemical industry (large-scaled, business-to-business oriented, capital-intensive) and retail trade (small-scaled, oriented towards consumers, labor-intensive). It appears that adjusted series, according to industry experts, give a more realistic description of historical developments than the original series do.

Suggested Citation

  • Ton Kwaak & Werner Liebregts, 2012. "Time series for main variables on the performance of Dutch SMEs," Scales Research Reports H201204, EIM Business and Policy Research.
    • Handle: RePEc:eim:papers:h201204
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    File URL: http://www.entrepreneurship-sme.eu/pdf-ez/H201204.pdf
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    References listed on IDEAS

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    4. Hildegart Ahumada & María Lorena Garegnani, 2000. "Assesing Hp Filter Performance for Argentina and U.S. Macro Aggregates," Journal of Applied Economics, Taylor & Francis Journals, vol. 3(2), pages 257-284, November.
    5. Arthur F. Burns & Wesley C. Mitchell, 1946. "Measuring Business Cycles," NBER Books, National Bureau of Economic Research, Inc, number burn46-1, March.
    6. Morten O. Ravn & Harald Uhlig, 2002. "On adjusting the Hodrick-Prescott filter for the frequency of observations," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 371-375.
    7. Beveridge, Stephen & Nelson, Charles R., 1981. "A new approach to decomposition of economic time series into permanent and transitory components with particular attention to measurement of the `business cycle'," Journal of Monetary Economics, Elsevier, vol. 7(2), pages 151-174.
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