Longitudinal Business Frame (LBF)
The Longitudinal Business Frame (LBF) is a longitudinal representation of the Business Register (BR) {previously the Business Frame, or BF} – the primary sampling frame used by Stats NZ. The LBF forms the backbone of the LBD, to which all other firm-level datasets are linked. The LBF captures basic information on all economically significant firms operating in New Zealand since 1999, including location, industry, business type, institutional sector, and parent-subsidiary relationships.
In addition to these core variables, the LBF also contains a range of information collected for the purposes of identifying Balance of Payments (BoP) survey populations. While the specific questions asked have changed over time, these have included indicators of substantial overseas assets, overseas revenue from or expenditure on services, an indicator of foreign subsidiary ownership, and the proportion of foreign ownership.
As usual, there is a good discussion of the LBF in Fabling and Sanderson’s Rough Guide to the LBD
Excerpt from Measuring business births and deaths in quarterly job-flow data:
The purpose of the The Longitudinal Business Frame (LBF) is to create longitudinal employer entities to help produce official business demography statistics. The LBF has also been a key data source for a number of important statistical research projects.
Data for the LBF is primarily sourced from Statistics NZ’s Business Frame (BF). The BF is a register of individual, private, and public-sector economically significant* businesses and organisations that are engaged in producing goods and services in New Zealand. The BF contains enterprise and geographic unit attributes such as industry, business type, and region. These attributes are registered in both the BF and LBF. Data for a small number of businesses on the LBF comes directly from the EMS, as the businesses are not on the BF.
The need to develop better methods to define and recognise business births and deaths was a key factor in creating the LBF. Before the LBF development, the methodology used to register and deregister businesses on the BF could not efficiently distinguish between genuine business births or deaths, and businesses merely changing administrative identifiers (but otherwise staying the same).
Events in the life of a business, such as a change in legal structure, restructuring (eg mergers or split-offs), or the business being sold as a going concern, may result in the business receiving a new identifier in the tax system. Subsequently, new tax registrations would appear on the BF as new business structures with new reference numbers. If the business is not identified as ongoing, through a BF questionnaire, the administrative changes in identifiers and reference numbers would show as a business birth for the succeeding business and a business death for the preceding business. However, neither administrative changes nor the events mentioned above necessarily indicate the occurrence of a birth or death of a business in the real world. The LBF longitudinal repair processes are described in more detail in appendix 1.
The LBF repair process culminates in the creation of the unique permanent business number (PBN), which is assigned to each geographic unit sourced from the BF, as well as to the units sourced directly from EMS data. The PBN is a unique identifier of a geographic unit on the LBF – it remains the same over time, even if tax system identifiers (or enterprise identifiers) representing the unit change in the data sources. The creation of the PBN is essential for identifying real births and real deaths on the LBF, at both the geographic unit and enterprise level. As discussed in the LEED section above, the geographic unit (or its PBN) is the statistical unit used in creating official LEED statistics. Note that while the LBF processes are set up to minimise the likelihood of creating erroneous links, there is no guarantee that all the links will be found, and therefore some false positives will be identified.
The business ‘birthing’ and ‘deathing’ strategies implemented on the BF are key to understanding the life-cycle status of PBNs sourced from the LBF. It is important to note the LBF repairs are run in conjunction with the BF processes – to create the PBN.
The BF birthing strategy is centred around the concept of economic significance (BF coverage is limited to economically significant enterprises). Most of the economic significance conditions are built into BF maintenance procedures and run on a monthly basis. For instance, all GST registrations that have more than $30,000 annualised GST turnover are added to the BF on a monthly basis. New births are given a ‘birth date’ equal to the GST registration date of the business.7 Other sources used to identify births include the IR10 annual tax return and the EMS.
Within the economy there are also businesses that ‘reactivate’ (in the tax system and real world) after a dormant period. The monthly birth processes also identify previously ceased businesses that are active in the tax system, 12 months or more after being ceased, by using a combination of GST, IR10, and EMS information.
Along with a birth date, a ceased business is provided with a ‘cease date’. A number of processes are used to cease a business on the BF. For example, a unit that deregisters for GST is given a cease date equal to the last month the unit filed a GST return.
Mathew Page (2003), 'Measuring business births and deaths in quarterly job-flow data: Using the Linked Employer-Employee Dataset', Statistics New Zealand Working Paper No 11–03
