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A Comparison of Qualitative and Quantitative Firm Performance Measures

Author Info

Listed author(s):
  • Fabling, Richard

    (Reserve Bank of New Zealand)

  • Grimes, Arthur

    (Motu Economic & Public Policy Research)

  • Stevens, Philip

    ()

    (Ministry of Economic Development, New Zealand)

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.

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File URL: http://www.med.govt.nz/about-us/publications/publications-by-topic/occasional-papers/2008/08-04-pdf/view
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Paper provided by Ministry of Economic Development, New Zealand in its series Occasional Papers with number 08/4.

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Length: 62 pages
Date of creation: May 2008
Handle: RePEc:ris:nzmedo:2008_004
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Keywords: Micro data; subjective data; firm performance; labour productivity;

Find related papers by JEL classification:

  • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General
  • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
  • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
  • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

References listed on IDEAS
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  1. Bound, John & Krueger, Alan B, 1991. "The Extent of Measurement Error in Longitudinal Earnings Data: Do Two Wrongs Make a Right?," Journal of Labor Economics, University of Chicago Press, vol. 9(1), pages 1-24, January.
  2. Hyslop, Dean R & Imbens, Guido W, 2001. "Bias from Classical and Other Forms of Measurement Error," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(4), pages 475-481, October.
  3. Richard B. Fabling & Arthur Grimes, 2007. "Practice Makes Profit: Business Practices and Firm Success," Small Business Economics, Springer, vol. 29(4), pages 383-399, December.
  4. Horowitz, Joel L. & Manski, Charles F., 1998. "Censoring of outcomes and regressors due to survey nonresponse: Identification and estimation using weights and imputations," Journal of Econometrics, Elsevier, vol. 84(1), pages 37-58, May.
  5. Prescott, Edward C, 1998. "Needed: A Theory of Total Factor Productivity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(3), pages 525-551, August.
  6. Charles Brown & Charles Brown, 1996. "Employer Characteristics and Work Environment," Annals of Economics and Statistics, GENES, issue 41-42, pages 275-298.
  7. Fabling, Richard & Grimes, Arthur & Sanderson , Lynda & Stevens, Philip, 2008. "Some Rise by Sin, and Some by Virtue Fall: Firm Dynamics, Market Structure and Performance," Occasional Papers 08/1, Ministry of Economic Development, New Zealand.
  8. Cooper, Arnold C. & Woo, Carolyn Y. & Dunkelberg, William C., 1988. "Entrepreneurs' perceived chances for success," Journal of Business Venturing, Elsevier, vol. 3(2), pages 97-108.
  9. Machin, Stephen J & Stewart, Mark B, 1990. "Unions and the Financial Performance of British Private Sector Establishments," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 5(4), pages 327-350, Oct.-Dec..
  10. repec:adr:anecst:y:1996:i:41-42:p:12 is not listed on IDEAS
  11. repec:adr:anecst:y:1996:i:41-42 is not listed on IDEAS
  12. Fabling, Richard, 2007. "Just How Innovative are New Zealand Firms? Quantifying & Relating Organisational and Marketing Innovation to Traditional Science & Technology Indicators," Occasional Papers 07/4, Ministry of Economic Development, New Zealand.
  13. George A. Akerlof & Janet L. Yellen, 1985. "Unemployment Through the Filter of Memory," The Quarterly Journal of Economics, Oxford University Press, vol. 100(3), pages 747-773.
  14. Nigel Pain & Dawn Holland, 1998. "The Diffusion Of Innovations In Central And Eastern Europe: A Study Of The Determinants And Impact O," NIESR Discussion Papers 137, National Institute of Economic and Social Research.
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Cited by:

  1. Arthur Grimes & Cleo Ren & Philip Stevens, 2012. "The need for speed: impacts of internet connectivity on firm productivity," Journal of Productivity Analysis, Springer, vol. 37(2), pages 187-201, April.
  2. Mok, Penny & Mason, Geoff & Stevens, Philip & Timmins, Jason, 2012. "A Good Worker is Hard to Find: Skills Shortages in New Zealand Firms," Occasional Papers 12/5, Ministry of Economic Development, New Zealand.
  3. Fabling, Richard & Grimes, Arthur & Sanderson , Lynda & Stevens, Philip, 2008. "Some Rise by Sin, and Some by Virtue Fall: Firm Dynamics, Market Structure and Performance," Occasional Papers 08/1, Ministry of Economic Development, New Zealand.
  4. Kaye-Blake, William & Flagler, Bette & Campbell, Rachel, 2012. "Business Strategies and Employment Decisions: Interviews with New Zealand Firms," Occasional Papers 12/4, Ministry of Economic Development, New Zealand.
  5. Les Oxley & Shangqin Hong & Philip McCann, 2013. "Why Size Maters: Investigating the Drivers of Innovation and Economic Performance in New Zealand using the Business Operation Survey," Working Papers in Economics 13/13, University of Waikato.

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