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Firm Dynamics in New Zealand: A Comparative Analysis with OECD Countries




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.

Suggested Citation

  • Duncan Mills & Jason Timmins, 2004. "Firm Dynamics in New Zealand: A Comparative Analysis with OECD Countries," Treasury Working Paper Series 04/11, New Zealand Treasury.
  • Handle: RePEc:nzt:nztwps:04/11

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    References listed on IDEAS

    1. Robert J. Gordon, 1997. "The Time-Varying NAIRU and Its Implications for Economic Policy," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 11-32, Winter.
    2. Laurence Ball & N. Gregory Mankiw, 2002. "The NAIRU in Theory and Practice," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 115-136, Fall.
    3. Thomas Laubach, 2001. "Measuring The NAIRU: Evidence From Seven Economies," The Review of Economics and Statistics, MIT Press, vol. 83(2), pages 218-231, May.
    4. Fabiani, Silvia & Mestre, Ricardo, 2000. "Alternative measures of the NAIRU in the euro area: estimates and assessment," Working Paper Series 0017, European Central Bank.
    5. Skalin, Joakim & Ter svirta, Timo, 2002. "Modeling Asymmetries And Moving Equilibria In Unemployment Rates," Macroeconomic Dynamics, Cambridge University Press, vol. 6(02), pages 202-241, April.
    6. Joseph Stiglitz, 1997. "Reflections on the Natural Rate Hypothesis," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 3-10, Winter.
    7. Douglas O. Staiger & James H. Stock & Mark W. Watson, 1997. "How Precise Are Estimates of the Natural Rate of Unemployment?," NBER Chapters,in: Reducing Inflation: Motivation and Strategy, pages 195-246 National Bureau of Economic Research, Inc.
    8. repec:cup:macdyn:v:6:y:2002:i:2:p:202-41 is not listed on IDEAS
    9. Hansen, Bruce E., 2000. "Testing for structural change in conditional models," Journal of Econometrics, Elsevier, vol. 97(1), pages 93-115, July.
    10. Andrews, Donald W K & Ploberger, Werner, 1994. "Optimal Tests When a Nuisance Parameter Is Present Only under the Alternative," Econometrica, Econometric Society, vol. 62(6), pages 1383-1414, November.
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    Cited by:

    1. Evans, Lewis, 2009. "Capital Market Integration: The Structure of the New Zealand Economy and its Capital Markets," Working Paper Series 4035, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    2. David Law & Bob Buckle & Dean Hyslop, 2006. "Toward a Model of Firm Productivity Dynamics," Treasury Working Paper Series 06/11, New Zealand Treasury.
    3. repec:spr:jbuscr:v:12:y:2016:i:1:d:10.1007_s41549-016-0001-6 is not listed on IDEAS
    4. Sanderson , Lynda, 2004. "Trade and Networks: Mechanisms for Productivity Growth," Occasional Papers 06/5, Ministry of Economic Development, New Zealand.
    5. Greene, Francis, 2012. "Should the focus of publicly provided small business assistance be on start-ups or growth businesses?," Occasional Papers 12/2, Ministry of Economic Development, New Zealand.
    6. W. A. Razzak, 2016. "New Zealand Labor Market Dynamics: Pre- and Post-global Financial Crisis," Journal of Business Cycle Research, Springer;Centre for International Research on Economic Tendency Surveys (CIRET), vol. 12(1), pages 49-79, September.
    7. Crawford, Ron & Fabling, Richard & Grimes , Arthur & Bonner, Nick, 2004. "Determinants of National R&D and Patenting: Application to a Small, Distant Country," Occasional Papers 06/2, Ministry of Economic Development, New Zealand.
    8. Sid Durbin, 2004. "Review of Workplace Skills, Technology Adoption and Firm Productivity: A Review," Treasury Working Paper Series 04/16, New Zealand Treasury.

    More about this item


    Firm Size; Firm Dynamics; Firm Growth; Entry and Exit;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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