Research using the LBD
Here we bring together papers using the LBD. There have been many going before us, putting in the hard mahi. Make sure you read how people have dealt with the data, and why they have made their choices.
I have divided the list into three groups:
The first are likely to be the most intensively peer-reviewed, then the second. As for the last: who knows?
The titles will hotlink to the source of the paper. Because these can break over time, we have uploaded some of these papers to this Confluence site. These will appear as pictures underneath the title, e.g.:
For a summary of firm-level research work using the LBD, see
For a handy spreadsheet bibliography of research using the LBD up until September 2015 see Eyal Apatov Bibliography of research using the New Zealand Longitudinal Business Database.
Journal articles
Title | Authors | Year | Journal |
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|---|---|---|---|---|
Isabelle Sin, Steven Stillman, Richard Fabling | 2022 | The Review of Economics and Statistics | As in other OECD countries, women in New Zealand earn substantially less than men with similar observable characteristics. In this paper, we use fifteen years of linked employer-employee data to examine different explanations for this gender wage gap. We find an overall gender wage gap between 20% and 28%, of which gender differences in sorting across occupations explain 9%, across industries 16% to 19%, and across firms 5% to 9%, respectively. The remaining within-firm gender wage gap is still between 13% and 17%. Around 5 percentage points of this are explained by women being less willing to bargain or less successful at bargaining to capture firm-specific rents. Gender differences in productivity also explain at most 4.5 percentage points of this remaining gap. These results suggest that taste discrimination is also important for explaining why women are paid less than their relative contribution to firm output. Across-industry and over-time variation in the gender wage-productivity gap further support this conclusion | |
Emigration and employment impacts of a disastrous earthquake: country of birth matters | Richard Fabling, Arthur Grimes & Levente Timar | 2022 | Regional Studies | Two earthquakes in Christchurch, New Zealand, in 2010–11 caused 185 casualties, demolished much of the inner-city and caused significant job losses. We examine one form of adjustment to these outcomes: (international) emigration. Using a difference-in-difference approach, we analyse employment and emigration responses of Christchurch workers relative to matched workers elsewhere. We also examine heterogeneity in responses across subgroups defined by sex, age and country of birth. Significant emigration occurs following the second (more severe) earthquake mirroring job loss patterns. Effects differ by sex and age, and also by country of birth with the foreign-born much more likely to emigrate than the locally born. |
David C. Maré, Lynda Sanderson, Richard Fabling | 2021 | Labour Markets, Migration and Mobility: Essays in Honour of Jacques Poot. New Frontiers in Regional Science: Asian Perspectives. | This paper examines remuneration patterns among workers in foreign-owned firms operating in New Zealand. By tracking workers as they move across jobs in different types of firms, we document the extent of the “foreign wage premium” distinguishing between compositional factors (e.g., differences in industry and employment composition between foreign and domestic firms) and remaining differences in wage levels and growth rates. We find that much of the average earnings gap between foreign- and domestically-owned firms is due to compositional factors—foreign firms tend to be larger and to employ workers who would have received relatively high wages regardless of where they worked. However, even among apparently similar workers and firms, we find a two to four percent earnings gap between workers in domestic and foreign-owned firms. This gap is primarily associated with a wage increase of around two percent on moving from a domestic to a foreign firm, augmented by higher wage growth within foreign-owned firms. However, these premia appear to be specific to foreign-firm employment, as workers who return to domestically-owned firms do not appear to retain these additional earnings in their subsequent jobs. | |
The importance of spatial differences in total factor productivity: New Zealand, 2001–16 | Richard I Harris | 2021 | Regional Studies | Using firm-level panel data and estimating production functions for 37 industries, covering the 2001–16 period, this paper finds that firms in the Wellington region of New Zealand are on average about twice as productive as those in the rest of the South Island (which has the lowest average productivity). As to whether ‘place’ effects are the major explanation for such spatial differences or if ‘firm mix’ is more important, this study finds that agglomeration plays only a minor role in determining firm-level productivity levels, while the importance of spatial factors in accounting for the differential between productivity in Wellington and other areas was generally very small. |
The importance of frontier firms in total factor productivity in New Zealand, 2001–2016 | Richard I Harris | 2020 | New Zealand Economic Papers 54(4):1-2 | Using firm-level panel data and estimating production functions for 37 industries, covering the 2001–16 period, this paper finds little evidence of major changes in frontier TFP over 2001–16, and limited evidence of catching-up; that is, it seems very likely that New Zealand firms at the national frontier are not keeping pace with global frontier firms. The most important conclusion from this study is that while there is some evidence of a failure of productivity-enhancing technologies to diffuse from firms operating at the national productivity frontier, the major problem is failure of productivity-enhancing technologies to diffuse from firms operating at the global productivity frontier. New Zealand’s major problem is that frontier firms are underperforming because of their characteristics (e.g. small and lacking international connections) while productivity is overall adversely affected by a lack of competition, which generally creates barriers to exiting and insufficient reallocation of market shares from lower- to higher-productivity firms. |
Dean Hyslop, Richard Fabling, Dave Maré | 2017 | New Zealand Economic Papers, 51(3) | This paper examines firm multifactor productivity (mfp) growth and changing skill levels of labour in New Zealand, using NZ microdata for 2001–2012. | |
Firm-Level Hiring Difficulties: Persistence, Business Cycle And Local Labour Market Influences | Richard Fabling & David Maré | 2016 | Journal of Labor Research, 37, pp. 179–210 | We examine the correlates of reported hiring difficulties at the firm level using linked employer-employee and panel survey data over 2005-2011, focussing on the relative influence of firm-level characteristics, persistence, the business cycle and local labour market liquidity. |
Productivity spillovers from foreign direct investment in New Zealand | Tinh Doan, David Maré, Kris Iyer | 2015 | New Zealand Economic Papers, 49:3, 249-275 | This paper examines whether FDI has spillover effects on the productivity of domestic firms. Three types of potential spillovers are considered: horizontal (within industry), backward (foreign-owned customers) and forward (foreign-owned suppliers). The study uses data on a 10-year panel of firms and covers almost all business sectors in the New Zealand economy from 2000 to 2010. Panel methods are used to control for firm heterogeneity and the endogeneity of FDI. Separate estimates are obtained by industry group and by firm size. We find little evidence of substantial positive spillover effects from FDI to local firms’ productivity. |
David Maré, Richard Fabling, Steven Stillman | 2014 | Papers in Regional Science, 93.1, pp. 183-201 | We combine firm-level innovation data with area-level Census data to examine the relationship between local workforce characteristics, especially the presence of immigrants and local skills, and the likelihood of innovation by firms. We examine a range of innovation outcomes, and test the relationship for selected subgroups of firms. | |
Export performance, invoice currency and heterogeneous exchange rate pass-through | Richard Fabling, Lynda Sanderson | 2014 | The World Economy 38(2), pp.315-339 | Using comprehensive, shipment-level merchandise trade data for a small, open economy, we examine heterogeneity in exporters' exchange rate pass-through (ERPT) behaviour. We draw together two recent studies of ERPT, linking invoice currency decisions and firm performance to heterogeneity in ERPT. Like these studies, we find that the short-run reaction of export unit values to exchange rate fluctuations is significantly related to both invoice currency choice and exporter characteristics when these are analysed separately. However, we then show that when the two factors are jointly accounted for, the role of exporter characteristics largely disappears. That is, some firm types are more inclined to invoice in the producer currency, while others use either the local or a vehicle currency. In the short run, this translates into differences in exchange rate pass-through because of price rigidity in the invoice currency. Firm characteristics do not have an independent impact on pass-through beyond their effect on currency composition. Differences across invoice currencies diminish over time, but do not disappear, as prices adjust to reflect bilateral exchange rate movements. |
David Maré, Daniel Graham | 2013 | Journal of Urban Economics, 75, pp. 44-56 | This paper examines three key issues encountered when estimating the relationship between agglomeration and multi factor productivity (‘agglomeration elasticities’): the sorting of heterogeneous firms, the convexity of agglomeration effects, and the challenges of identifying the impact of persistent spatial differences in effective density. We use a firm-level panel containing production data together with detailed information on the geographic location of employment, covering a high proportion of the New Zealand economy. We are able to control for heterogeneity along firm, region, and industry dimensions, and to estimate separate agglomeration elasticities across industries and regions. | |
Exporting and performance: Market entry, investment and expansion | Richard Fabling, Lynda Sanderson | 2013 | Journal of International Economics 89(2), pp. 422-431 | This paper examines input and productivity dynamics of manufacturing firms in the period leading to and following export market entry. We examine 3 possible explanations for the observed productivity gap between exporting and non-exporting firms: self-selection of high-performing firms into exporting; post-entry learning effects; and joint export-investment decisions. We consider both initial entry into exporting and subsequent expansion into new destination markets, showing that capital deepening and employment growth are associated with both types of entry. However, the timing of investment differs between the 2 entry events. The observed dynamics are consistent with a model of investment under uncertainty, in which first-time exporters delay investment to gain more information about the success of their export ventures, while experienced exporters pre-commit to capital deepening in advance of additional market expansion. |
Any port in a storm? Uptake of new port infrastructure by New Zealand exporters | Richard Fabling, Arthur Grimes, Lynda Sanderson | 2013 | Transportation Research E: Logistics and Transportation Review 49(1), pp. 33-47 | This paper investigates the impact of port infrastructure on exporter behaviour, focusing on the opening of a competing inland port within Auckland. We model adoption of the new facilities among local firms, and test the impacts of uptake on future export growth. We find that the determinants of uptake are product- and firm-related, rather than location-specific. Firms use the new infrastructure in conjunction with the existing port to mitigate capacity constraints and/or access a greater range of transport options. However, we find no significant effect of the port’s introduction on firms’ subsequent export performance. |
Foreign acquisition and the performance of New Zealand firms | Richard Fabling, Lynda Sanderson | 2013 | New Zealand Economic Papers 48(1), pp.1-20. | This paper examines the firm-level determinants of foreign acquisitions of New Zealand companies, and the consequences for both purchased firms and the workers within those firms. We follow a combined propensity score matching and difference-in-difference approach to identify and address endogenous selection of acquisition targets. The results suggest that foreign firms tend to target high-performing New Zealand companies. Acquired firms then exhibit higher growth in average wages and output, relative to similar domestic firms, but do not appear in general to increase their productivity or capital intensity. We find no evidence of differential survival rates for recently acquired foreign firms. |
The relatives are fine: Use of qualitative firm data in economic analysis | Richard Fabling, Arthur Grimes, Philip Stevens | 2012 | Applied Economics Letters, 19(7):615-618 | We use qualitative and quantitative data for the same firms to examine the robustness of firms' qualitative responses regarding their performance. In contrast to some prior studies, firms accurately respond to qualitative questions regarding productivity and profitability relative to other firms. One reason for this accuracy is that the qualitative response options specifically include a don't know category that reduces misreporting and bias. |
Richard Fabling, Arthur Grimes, Lynda Sanderson | 2012 | Papers in Regional Science 91(1), pp. 137-159 | We examine product and market entry choices of New Zealand exporters, using enterprise-level data on firm performance and merchandise trade. For firms already exporting, we ask: What determines their choices about what and where to export? General and specific prior trade experience play an important role in determining firms' future export activities, as do the export activities of other firms in the local area (a learning effect). These results are robust to the inclusion of other export determinants, including the macroeconomic performance of destination countries, exchange rate movements, and the past performance of the exporting firm. | |
Evaluation of a New Zealand business support programme using firm performance micro-data | Michele Morris, Philip Stevens | 2010 | Small Enterprise Research, 17(1):30-42 | This paper presents an evaluation of the impact of a New Zealand government support programme on participating firms using a new firm-level panel dataset from 2000–2006. We provide quantitative estimates of the direct benefits to firms receiving this support compared to similar firms that did not receive assistance. We have found the programme had a significant positive impact on the sales of firms, although the impact on value-added and productivity was less conclusive. There is evidence that the impact was strongest for firms receiving assistance prior to 2004. The results are sensitive to methodology, showing the importance of considering the impact of technique on measured impact in evaluations. This is the first time we have been able to quantify the net economic benefit of business assistance in New Zealand. |
Cutting the Hedge: Exporters' Dynamic Currency Hedging Behaviour | Richard Fabling, Arthur Grimes | 2010 | Pacific-Basin Finance Journal | We use a dataset that includes all New Zealand merchandise export transactions to analyse exporters' dynamic currency hedging behaviour. We focus on whether exporters change their hedging behaviour (“selectively hedge”) when the exchange rate and/or forward points depart from historical norms. We find that hedging ratios for exporters' Australian dollar exposures vary systematically as the exchange rate departs from historical averages; this behaviour is more marked for larger relative to smaller exporters. Consistent with efficient markets theory, there is no evidence that selective hedging is a profitable strategy for exporters. |
The Need for Speed: Impacts of Internet Connectivity On Firm Productivity | Arthur Grimes, Cleo Ren, Philip Stevens | 2009 | Journal of Productivity Analysis | The paper decomposes GDP both in terms of level per capita and growth rate, so as to identify the sources of income differences and of economic growth for all EU27 member states. This accounting approach has multiple advantages, although a number of substantial caveats should be borne in mind when interpreting the results. In particular, the detailed accounting approach helps distinguish exogenous from policy-influenced growth drivers. The combination of lower per-hour productivity and lower labour utilisation is the cause of relatively low per capita GDP in euro area and EU15 countries, while weak productivity remains the main concern in the new member states. GDP growth rate has been broken down into 12 items, including an indicator of labour quality, based upon the composition of employment by educational attainment. |
Entrepreneurship and aggregate merchandise trade growth in New Zealand | Richard Fabling, Lynda Sanderson | 2009 | Journal of International Entrepreneurship 8(2), pp.182-199 | We present a descriptive analysis of firm-level merchandise trade, focussing on the role of novel exporting behaviour. We document two aspects of the dynamics of trade—the contribution of novel activity to aggregate export growth and, conversely, the substantial exit rates of new trade relationships. The unique contribution of this paper lies in the detailed and comprehensive data we have available on market and product choices. Specifically, we make use of shipment-level goods trade data, linked to information for the universe of economically active New Zealand manufacturers, to examine trade at the firm level and at the product-country-firm nexus. Our growth decomposition and survival analysis suggest several themes: (a) novel market entry is a significant contributor to aggregate export growth; (b) the study of international entrepreneurial behaviour should encompass not just de novo entrants, but the broad range of trade innovations initiated by incumbent exporters; (c) much expansion in trade appears to be incremental in nature; (d) despite this, such innovations appear to be inherently risky; and (e) experience and scale appear to be key factors in overcoming these risks (or at least proxies for such factors). |
Working papers
| Author(s) | Year | Abstract | Working paper series |
|---|---|---|---|---|
Does high-speed internet boost exporting?  | Lynda Sanderson, Garrick Wright-McNaughton, Naomitsu Yashiro | 2023 | This paper examines the links between uptake of high-speed internet and entry into exporting among New Zealand firms. The analysis draws on on rich, longitudinal information about firms’ use of ICT captured in Stats NZ's Business Operations Survey (BOS) to both identify firms which shifted to UFB and infer differences across firms in their capability to exploit the faster internet connections. It shows that firms that shifted to fibre broadband in the early years of New Zealand’s Ultra-Fast Broadband rollout were subsequently more likely than other, similar firms to start exporting, and that the strength of this relationship depends upon both the industry in which firms operate and their pre-existing use of the internet for core business activities. To explore the causality lying behind this relationship, the paper makes use of a policy choice to prioritise schools in the rollout of the new fibre broadband infrastructure as an instrument for early uptake. While the results are consistent with a positive effect of UFB uptake on export entry, the instruments are not strong enough to draw firm conclusions on causality. | NZPC |
Worker Skills or Firm Wage-Setting Practices? Decomposing Wage Inequality Across 20 OECD Countries | Richard Fabling, + others | 2023 | What drives differences in pay between firms? To answer this question, we build a harmonised cross-country linked employer-employee data set to analyse the role of firms in wage inequality since the 2000s in 20 OECD countries. The main finding is that, on average across countries, changes in the dispersion of average wages between firms explain about half of the changes in overall wage inequality. Two-thirds of these changes in between-firm wage inequality, i.e. about a third of overall wage inequality, are accounted for by changes in wage premia, i.e. the part of wages that is determined by the firm rather than the characteristics of its workers. The contribution of wage premia tends to be larger in countries with decentralised collective bargaining systems and lower levels of job mobility. The remaining third, i.e. a sixth of overall wage inequality, can be attributed to changes in workforce composition, including the sorting of high-skilled workers into high-paying firms. These results suggest that firms play an important role in explaining wage inequality as wages are determined, to a significant extent, by firm wage-setting practices rather than being exclusively determined by workers’ earnings characteristics. | IZA |
Multidimensional disadvantage and wellbeing  | Lynn Riggs | 2023 | While poverty is thought to be an enduring cause of socioeconomic disadvantage, determining which people live in poverty is not a straightforward task. Hence, examining the relationship between poverty, disadvantage and wellbeing is complicated by the difficulty of determining the extent to which people live in poverty or the extent to which they are disadvantaged. In the past, poverty measurement has predominantly been income based. However, due to the limitations of income measurement and the somewhat arbitrary setting of income poverty thresholds, some people who are not impoverished are counted as impoverished and vice versa. Recent work in poverty measurement has endeavoured to capture measures of both deprivation and social exclusion as poverty indicators. This paper differs from previous research by examining the dimensions of disadvantage, irrespective of an a priori classification of indicators, to assess the extent to which indicators of disadvantage are in fact measuring different dimensions of disadvantage. Principal Components Analysis is used to construct measures of the different dimensions of disadvantage, and these measures are used to examine the relationship between these different dimensions of disadvantage and wellbeing. | NZPC |
Domestic transport charges: Estimation of transport-related elasticities | Dean Hyslop, Trinh Le, David Maré, Lynn Riggs and Nic Watson | 2023 | In order to better understand the potential effects of transport policies, it is important to understand household spending patterns across different transport-related categories as well as across different households. This study uses three distinct approaches to estimating transport elasticities for New Zealand: cross section, time series, and event studies. The estimated own-price elasticity of fuel demand ranges from –0.1 (very inelastic) based on time-series data to around –2 (very elastic) based on the event-study approach. Using cross-sectional household-level data and regional price variation, we estimate that price elasticity of petrol demand is –0.66 over all households, and ranges from –0.78 for the lowest household expenditure quintile to –0.43 for the highest expenditure quintile, indicating that petrol demand is price-inelastic, and more so for richer households. The different fuel price elasticities estimated by this study represent a range of possible consumer responses when modelling the impact of price changes. | Motu |
Dean R. Hyslop, David C Maré, Shannon Minehan | 2023 | This paper analyses the impacts of the WSS on both firm and worker level economic outcomes. We adopt a ‘doubly-robust’ estimation approach, that uses propensity score methods both to match subsidy receiving firms to similar non-subsidised firms, and to weight the outcomes analysis. Our analysis focuses on the first four WSS-waves: the March 2020 (Original), Extension, Resurgence, and March 2021 waves. |
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Migration and firm-level productivity  | Richard Fabling, | 2022 | We use linked employer-employee microdata for New Zealand to examine the relationship between firm-level productivity, wages and workforce composition. Jointly estimating production functions and firm-level wage bill equations, we compare migrant workers with NZ-born workers, through the lens of a derived “productivity-wage gap” that captures the difference in relative contribution to output and the wage bill. Whether we look at all industries using a common production function, or separately estimate results for the five largest sectors, we find that skilled and long-term migrants make contributions to output that exceed moderately-skilled NZ-born workers, with that higher contribution likely being due to a mix of skill differences and/or effort which is largely reflected in higher wages. Conversely, migrants that are not on skilled visas are associated with lower output and lower wages than moderately-skilled NZ-born, also consistent with a skills/effort narrative. The share of employment for long-term migrants has grown over time (from 2005 to 2019) and we show that their relative contribution to output appears to be increasing over the same period. Finally, we present tentative evidence that high-skilled NZ-born workers make a stronger contribution to output when they work in firms with higher migrant shares, which is suggestive of complementarities between the two groups or, at least, positive mutual sorting of these groups into higher productivity firms. | NZPC |
The evolution of management practices in New Zealand 
| Lynda Sanderson | 2022 | This paper examines the evolution of management practices in New Zealand, decomposing the overall change in the prevalence of particular practices between 2005 and 2017 into the portions due to changes in practices within firms and those due to the changing composition of the economy. The analysis draws on four waves of the Business Operations survey (BOS), which provide consistent measures of self-reported management practices among New Zealand firms. Questions cover a range of topics including “strategy, goals and planning”, “information and benchmarking”, “quality and process”, and “employee practices”. We first establish the extent to which broad changes in industry composition have affected the overall prevalence of certain practices, then turn to the relative roles of firm entry, firm exit, and within-firm practice change. | MBIE |
Firm productivity growth and the knowledge of new workers 
| Michael Kirker, Lynda Sanderson | 2022 | Linked employer-employee data from New Zealand is used to study the relationship between a firm’s productivity growth and its exposure to outside knowledge through the hiring of new workers with previous work experience. The estimated relationship between productivity growth and hiring is compared to the predictions implied by two different channels: worker quality and knowledge spillover. Although it is not possible to identify a causal relationship, the productivity of a worker’s previous employer is correlated with subsequent productivity growth at the hiring firm. The patterns of this correlation are consistent with both the worker quality and knowledge spillover channels operating simultaneously. Furthermore, if knowledge spillover is occurring, the results suggest the type of knowledge spilling over relates to technological knowledge allowing firms to become more capital intensive, rather than knowledge that improves the efficiency of utilising existing inputs. | Treasury |
Who benefits from firm success? Heterogeneous rent-sharing in New Zealand 
| Corey Allan, David C. Maré | 2022 | We continue our examination of inclusive growth at the firm level by examining heterogeneity in rent sharing in New Zealand using linked employer-employee data. We test for heterogeneity in rent sharing across a range of worker and firm characteristics including gender, ethnicity, age, qualifications, tenure, firm size, firm age, and industry. We also refine our measure of quasi-rents and estimate the level of excess quasi-rents per worker, or the amount of rents above the threshold beyond which rent sharing occurs. We find that between 20% and 30% of workers are in firms that earn zero excess rents. These workers are concentrated in the hospitality, administrative services, and retail industries and are more likely to be women, to be Māori or Pacific peoples, and have lower-level qualifications. We find an overall rent-sharing elasticity of 0.03, which is equivalent to a $38 increase in annual wages in response to a $1,000 increase in excess rents per worker. We find differences in rent sharing by levels of highest qualification, tenure, and ethnicity. We find no differences in rent sharing by firm size or firm age. Rent sharing is similar across industries, with workers in most industries receiving between $1,500 and $2,000 of rents per year. The auxiliary finance and professional, scientific, and technical services sectors share the most, while grocery retailing, food and beverage manufacturing and utilities share the least. Insurance type behaviour by firms is consistent with the variation in rent sharing across industries, although differences in bargaining power are also likely to play a role in explaining differences in rent sharing across groups. | MBIE |
Of interest? Estimating the average interest rate on debt across firms and over time 
| Richard Fabling | 2021 | Finance-constrained firms face higher interest rates but are more risky. Constraints on business finance may lead to underinvestment in productivity-raising physical and knowledge capital. At the same time, well-functioning financial markets provide useful discipline on managers and their business decisions, signalling a reasonable expected return on investment accounting for risk. | Motu |
Living on the edge: An anatomy of New Zealand’s most productive firms 
| Richard Fabling | 2021 | Employing a novel definition of the production frontier, we investigate the characteristics and performance of New Zealand’s frontier firms from 2005 to 2018. This paper draws on the Fabling-Maré labour and productivity datasets available in the Longitudinal Business Database. | Motu |
Do workers share in firm success? Pass-through estimates for New Zealand 
| Corey Allan and David C. Maré | 2021 | We study the extent to which firm financial performance is passed on to workers in the form of higher wages and the degree to which this pass-through has changed over the period 2002-2018. We use both value added per worker and a measure of quasi-rents as measures of financial performance. Value added per worker is the standard measure used internationally. Quasi-rents better approximate the resources available to be shared between workers and firms as it takes into account the rental cost of capital as well as the reservation wages of workers. We estimate the reservation wage bill for each firm using estimates from a two-way fixed-effect model. We estimate models similar to those typically used in the international literature and further decompose the estimated pass-through into the contribution from worker sorting and the contribution from rent-sharing. Our instrumental variables estimates of pass-through are in the range of 0.12 and 0.19 for value added and 0.11 and 0.07 for quasi-rents. Worker sorting explains between 35% and 50% of pass-through. While the extent of overall pass-through is relatively stable over time, the contribution of worker sorting declines dramatically to explain almost none of the estimated pass-through. We contribute to the literature by demonstrating a method to calculate quasi-rents, by testing for changes over time in pass-through, and examining the relative importance of worker sorting over time. | MBIE |
Benchmarking New Zealand’s frontier firms 
| Guanyu Zheng, Hoang Minh Duy, Gail Pacheco | 2021 | New Zealand has experienced poor productivity performance over the last two decades. Factors often cited as reasons behind this are the small size of the domestic market and distance to international partners and markets. While the distance reason is one that is fairly insurmountable, there are a number of other small advanced economies that also face similar domestic market constraints. This study compares the relative performance of New Zealand’s firms to those economies using novel cross-country microdata from CompNet. Stylised facts are presented for New Zealand relative to the economies of Belgium, Denmark, Finland, Netherlands and Sweden based on average productivity levels, as well as benchmarking laggard, median and frontier firms. This research also employs an analytical framework of technology diffusion to evaluate the extent of productivity convergence, and the impact of the productivity frontier on non-frontier firm performance. Additionally, both labour and capital resource allocation are compared between New Zealand and the other small advanced economies. Results show that New Zealand’s firms have comparatively low productivity levels and that its frontier firms are not benefiting from the diffusion of best technologies outside the nation. Furthermore, there is evidence of labour misallocation in New Zealand based on less labour-productive firms having disproportionally larger employment shares than their more productive counterparts. Counter-factual analysis illustrates that improving both technology diffusion from abroad toward New Zealand’s frontier firms, and labour allocation across firms within New Zealand will see sizable productivity gains in New Zealand. | NZPC |
Labour market impacts of technology change: Evidence from linked employer-employee data 
| Corey Allan and Lynda Sanderson | 2021 | Advances in robotics and artificial intelligence mean that tasks previously considered the domain of humans are able to be performed by machines, potentially displacing workers currently performing those tasks. The aim of this research is to explore whether we are beginning to observe the impact of automation in the New Zealand labour market. To this end, we examine the relationship between the degree of self-reported technology change and firm-level employment outcomes in New Zealand over the period 2005-2016. We use a combination of survey and administrative data in Stats NZ’s Longitudinal Business Database and Integrated Data Infrastructure. We test whether firms that report undertaking major technology change differ from other firms in terms of their employment and wage growth, changes in the wage distribution, and changes in the qualifications structure of their workforce. The main finding is that firms experience more rapid employment growth following a major technology change. Where we do find evidence of changes in the qualifications structure of firm workforces, the changes are relatively small. Our estimates suggest that firms increase their demand for workers with university qualifications and there is some evidence they reduce their demand for workers with a post-school qualification. However these changes are relatively small, equivalent to between 0.5 and three workers in an average firm of 140 workers. The relationships are strongest among the small group of firms that report three major technology changes over a three year period and an organisational or process innovation. | MBIE |
Transition Strategy team, MBIE | 2021 | We calculated the emissions intensity (tonnes of carbon dioxide equivalent emissions per | MBIE | |
Workforce Composition, Productivity and Pay: The Role of Firms in Wage Inequality | Richard Fabling, + others | 2020 | In many OECD countries, low productivity growth has coincided with rising inequality. Widening wage and productivity gaps between firms may have contributed to both developments. This paper uses a new harmonised cross-country linked employer-employee dataset for 14 OECD countries to analyse the role of firms in wage inequality. The main finding is that, on average across countries, changes in the dispersion of average wages between firms explain about half of the changes in overall wage inequality. Two thirds of these changes in between-firm wage inequality are accounted for by changes in productivity-related premia that firms pay their workers above common market wages. The remaining third can be attributed to changes in workforce composition, including the sorting of high-skilled workers into high-paying firms. Over all, these results suggest that firms play an important role in explaining wage inequality as wages are driven to a significant extent by firm performance rather than being exclusively determined by workers' earnings characteristics. | IZA |
 | Richard Fabling & David Maré | 2020 | We have developed a new database of commuting flows in New Zealand, for use in the Statistics NZ datalab. It draws on a range of confidentialised datasets within the Integrated Data Infrastructure (IDI) and Longitudinal Business Database (LBD). | Motu |
Firms dynamics and productivity growth  | John Stephenson | 2020 | This research note comprises two distinct parts. The first is a high-level review of existing analysis and research methods. The focus is on empirical analysis that makes use of firm-level data and the use of Stats NZ’s Longitudinal Business Database (LBD). The objective is to identify any significant gaps in research to date, in terms of answering the three questions listed above. They find that descriptive analysis predominates in the research and there is comparatively little research, at least in recent years, that can be a basis for diagnosing problems and informing policy decisions. They also find that existing descriptive analyses provide mixed evidence on important questions such as whether new firms contribute positively to productivity growth.In the second part of this note there is an updated decomposition of the contribution of firm dynamics to productivity growth. This update makes use of improved firm-level productivity data and improved decomposition methods, proposed by Diewert and Fox (2010). The research note concludes with a comment on directions for future research that would provide greater insight into firm dynamics, issues affecting productivity growth and potential policies to improve productivity growth. | NZPC |
Job-to-job transitions and the regional job ladder  | Andrew Coleman & Guanyu Zheng | 2020 | This paper uses linked employee-employer data to examine the frequency with which workers change jobs in New Zealand, wage premiums associated with these job transitions, and the impact of house prices on worker mobility. The most common change was for workers to transition from one job to another without a period of unemployment, helping workers to climb the “job ladder” to progress their skills, seniority, and wages. The Commission found that on average, every year, 21% of workers change their employers. About 61% stay where they are, and the rest leave the workforce going into retirement, unemployment, study or looking after family members. Focusing on the period after the 2008 global financial crisis, the Commission found that the recession meant workers were less likely to change jobs and, when they did move, any boost to their wages was lower than in non-recessionary times. | NZPC |
Improved productivity measurement in New Zealand's Longitudinal Business Database  | Richard Fabling & David Maré | 2019 | Accounts information that businesses supply to Inland Revenue for tax purposes provide over 96% of the observations in the productivity dataset in the Longitudinal Business Database. In 2013, material changes in the data collected halted the annual updating of the productivity dataset. This paper describes a method for accounting for these raw data discontinuities, and revisits the prior productivity dataset methodology, implementing wholesale changes that improve the overall quality of the data and the versatility of the productivity dataset. | Motu |
New jobs, old jobs: The evolution of work in New Zealand’s cities and towns 
| Andrew Coleman, Dave Maré, Guanyu Zheng | 2019 | This working paper uses Census data from 1976 to illustrate the changing economic geography of New Zealand’s cities and regions. This research distinguishes the employment dynamics of New Zealand’s large urban areas from those of smaller ones and shows how the transition paths out of manufacturing and into professional services sectors have varied among urban areas. It also shows how the economies of most cities and towns in New Zealand have become less reliant on specialist industries and more like each other, which has implications for regional labour mobility and government policy.While the material is largely descriptive, its aim is to unravel the effects of several different forces on the evolution of jobs, towns and cities. This paper is not designed to make predictions about either the future of work or the future of regions. Rather, by documenting the evolution of regional employment patterns in New Zealand over the last 40 years, it aims to help understand how New Zealand has got to its current situation. | NZPC |
Richard Fabling & David Maré | 2019 | Recent research by Motu Economic and Public Policy (Maré & Fabling, 2019a) highlights different aspects of competition within industries in New Zealand. This work draws on a redeveloped firm-level productivity dataset (Maré & Fabling, 2019b) and forms the basis for a summary report and web-based data visualisation tool (competition explorer) (Schiff & Singh, 2019). (The data files for this tool are available in the downloads section above.)This research was funded by the Ministry of Business, Innovation and Employment, New Zealand Productivity Commission, and The Treasury, with the Commerce Commission and Stats NZ providing advice on the project. A Cut to the Chase explains why these agencies undertook this work and some of the key messages that emerged. | NZPC | |
Firm dynamics and job creation: revisiting the perpetual motion machine | John Stephenson | 2019 | This paper presents analyses of firm dynamics in New Zealand. The purpose of the analysis is to revisit the findings of Meehan and Zheng (2015), to see if firm dynamics have changed since that study.The dynamics of “digital” firms have also been investigated – firms in industries that produce digital and communications technologies or support their use by other firms and consumers, or produce and sell digital content and media. | NZPC |
Barriers to generating  | Lynda Sanderson | 2017 | This note draws out data from the International Engagement module of the Business Operations Survey 2011. The module was designed to capture information on the international activities of a large, representative sample of New Zealand firms, including the types of activities they are involved in and the barriers they encounter. The note focuses on the level of interest that firms show in becoming internationally engaged, and how the barriers they perceive in entering and maintaining a place in international markets differ by their level of interest and experience. It also considers the extent to which interest in overseas income as reported in both the 2007 and the 2011 International Engagement modules translates to export market entry in later years, and how future entry propensity differs according to the barriers, motivations and strategies reported by the firm. | MBIE |
Productivity and the Allocation of Skills  | Trinh Le, Richard Fabling, Dave Maré, Nathan Chappell | 2017 | We use linked employer-employee data from 2004–2012, combined with individual qualifications data from 1994–2012, to study how graduates with different skills fare in the labour market in the six years after studying. We find that graduates experience improvements in earnings, and that they systematically move between jobs, industries and locations in a pattern that is consistent with their securing better job matches, particularly for high level STEM graduates. We then estimate joint production function and wage equations to see how the skill composition of a firm’s employees correlates with productivity, and compare this with how the skill composition correlates with its wage bill. Our results suggest that degree graduates make a growing positive contribution to production in the six years after graduation, with associated wage growth. There is variation in relative productivity and wages across groups of graduates that differ by field of study and level of qualification. | Motu |
 | Isabelle Sin, Steven Stillman, Richard Fabling | 2017 | As in other OECD countries, women in New Zealand earn substantially less than men with similar observable characteristics. In this paper, we use a decade of annual wage and productivity data from New Zealand’s Linked Employer-Employee Database to examine different explanations for this gender wage gap. Sorting by gender at either the industry or firm level explains less than one-fifth of the overall wage gap. Gender differences in productivity within firms also explain little of the difference seen in wages. The relationships between the gender wage-productivity gap and both age and tenure are inconsistent with statistical discrimination being an important explanatory factor for the remaining differences in wages. Relating across industry and over time variation in the gender wage-productivity gap to industry-year variation in worker skills, and product market and labour market competition, we find evidence that is consistent with taste discrimination being important for explaining the overall gender wage gap. Explanations based on gender differences in bargaining power are less consistent with our findings. | Motu |
Urban Productivity Estimation with Heterogeneous Prices and Labour | David Maré | 2016 | This study estimates differences in productivity (mfp) across New Zealand urban areas, with a focus on the size of Auckland’s productivity premium. The estimates are based on analysis of firm-level data from SNZ’s LBD. The methods used in the paper overcome some of the biases that arise in standard approaches to spatial productivity estimation - biases arising from imperfect competition, spatial price variation, firm heterogeneity, and labour-sorting across cities. Ignoring these factors leads to biased estimates of the Auckland’s relative productivity performance. The study also investigates industry differences in spatial productivity patterns. | Motu |
A Rough Guide to New Zealand's Longitudinal Business Database (2nd edition) 
| Richard Fabling & Lynda Sanderson | 2016 | New Zealand's Longitudinal Business Database is a rich resource for understanding the behaviour of New Zealand firms. This paper provides an introductory guide to the content and structure of the data aimed at new and prospective users. Where relevant, it references other publications which provide greater detail on particular aspects of the data. It also briefly describes access protocols for researchers, and processes for updating and expanding the database. | Motu |
Competition in New Zealand industries: Measurement and evidence | MBIE | 2016 | Competition works alongside other factors to determine the performance of economies. | MBIE |
Addressing the absence of hours information in linked employer-employee data 
| Richard Fabling, Dave Maré | 2015 | The availability of tax-based payroll data has proved a blessing to labour and business economists wishing to understand workers, their jobs and their employers. Unfortunately, administrative data do not always include key variables of interest. In the case of New Zealand, linked employer-employee data do not include any information on hours worked. |
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Dean Hyslop, Richard Fabling, Dave Maré | 2015 | This paper examines the relationship between firm multifactor productivity growth (mfp) and changing skill levels of labour in New Zealand, over the period 2001-12, using longitudinal data from Statistics New Zealand’s Longitudinal Business Database (LBD) and Integrated Data Infrastructure (IDI).Published as: Firm productivity growth and skill, New Zealand Economic Papers, 51:3, 302-326, DOI: 10.1080/00779954.2016.1203815 | Motu | |
Simon Wakeman | 2015 | This executive summary document discusses two working papers on innovation produced under the Longitudinal Business Database Partnership | Motu | |
Production function estimation using New Zealand’s Longitudinal Business Database 
| Richard Fabling & David Maré | 2015 | This paper is intended as a resource for researchers using the New Zealand Longitudinal Business Database (LBD) to study the productivity of New Zealand firms. First, it documents the methods used for creating a consistent dataset of production data, combining survey and administrative data sources. Second, it discusses a range of identification and estimation issues that arise when using the data for the estimation of multi-factor productivity. Finally, it demonstrates the value and usefulness of the data by presenting and comparing a range of productivity estimates for a single industry. | Motu |
Agricultural productivity in New Zealand: First estimates from the Longitudinal Business Database | Richard Fabling, Adam Jaffe, Michele Morris, Matt Thirkettle, Eyal Apatov | 2015 | In this study, we estimate the drivers of revenue and productivity in two key agricultural industries – dairy and sheep/beef. Together these account for about two-thirds of New Zealand’s agricultural exports. | Motu |
Guanyu Zheng, Lisa Meehan | 2015 | This paper uses a cohort approach to examine firm dynamics and employment growth in New Zealand. Consistent with overseas evidence, we find a large degree of churn in the economy, with many new, mostly small, firms being created each year. Many of these firms disappear relatively quickly, but those that manage to survive experience reasonable employment growth on average. However, much of this “on average” growth is driven by a very small number of firms with high employment growth. Indeed, we find that while the smallest firms play a relatively large role in accounting for net job creation, this growth involves just a modest proportion of the smallest firms, while the majority of these firms do not grow much at all. | NZPC | |
Hiring New Ideas: International Migration and Firm Innovation in New Zealand | Keith McLeod , Richard Fabling, Dave Maré | 2014 | In this paper, we combine firm-level innovation data with worker characteristics to examine links between innovation and the presence of new arrivals - both immigrants and returning New Zealanders - in the firm's workforce. | Motu |
Isabelle Sin, Richard Fabling, Adam Jaffe, Lynda Sanderson, Dave Maré | 2014 | This research uses Statistics New Zealand"s Integrated Data Infrastructure and data from the Business Operations Survey to investigate the correlations at the firm level between: 1. employee characteristics and firm international engagement, and 2. firm international engagement and innovation. | Motu | |
Guanyu Zheng & Paul Conway | 2014 | This paper investigates the proximity of firms to their customers to assess the extent to which different industries trade their output over distance within New Zealand. At the sector level, the output of the primary sector is traded across distance to the largest extent, followed by the goods-producing sector and then the services sector. However, these broad results mask considerable variation at the industry level. The paper also tentatively assesses the correlation between tradability and firm productivity. This shows that firms in the goods-producing and service sectors that trade their output over distance tend to have higher labour productivity than firms located closer to their customers and more focused on the local market. The paper investigates three possible reasons for this link between domestic tradability and labour productivity. In short, the potential for firms to agglomerate, along with the scale and competition benefits that large markets allow, may underpin productivity improvements compared to firms that produce output only for the local market. | NZPC | |
Estimating Firm-Level Effective Marginal Tax Rates and the User Cost of Capital in New Zealand | Richard Fabling, Norman Gemmell , Richard Kneller , Lynda Sanderson | 2013 | Effective marginal tax rates (EMTRs) can be very different from the statutory rate and vary across firms, reflecting such factors as the extent and nature of taxable deductions (losses, depreciation), asset and ownership structures, and debt/equity financing. We estimate firm-specific EMTRs and related user cost of capital (UCC) measures allowing for shareholder-level taxation using data for 2000-2010 from the Longitudinal Business Database. | Motu |
Sources of international investment data in the Longitudinal Business Database  | Lynda Sanderson | 2013 | The LBD links together firm-level data held by Stats NZ from a combination of administrative and survey data sources. This linking has opened up a wide range of research opportunities. In many cases, there are now multiple sources of information on a single area of firms' activities, often capturing different aspects or a different population, requiring a choice to be made about the most appropriate source of data for any given research question. This note outlines the available firm-level data sources for research on foreign direct investment, describes the data available, and sets out some of the opportunities and challenges for using these data for research purposes. It also provides detail on maintenance procedures for one of the core elements of the LBD, the Longitudinal Business Frame, which is applicable to a wide variety of firm-level research topics. | Motu/ Treasury |
Richard Fabling & David Maré | 2012 | This paper examines the dynamics of employment adjustment in New Zealand, focusing on the response of firms to the 2008/09 Global Financial Crisis. We use data from Statistics New Zealand"s prototype Longitudinal Business Database (LBD) to examine firms' employment responses to output shocks before and after the crisis, and to investigate variations in job and worker flows. We discuss the resilience of the NZ labour market to economic shocks, and the possible role of labour market policy settings. Finally, we discuss preliminary findings on the differential impact of labour market adjustment on workers - by earnings level, age, gender, and tenure - and outline potential further work along these lines. | Motu | |
Business Strategy and Skills in New Zealand  | Philip Stevens | 2012 | This paper summarises the results from two projects that investigated skills in New Zealand businesses. The first – The Impact of Skills on New Zealand Firms – combined three different surveys to investigate the availability of skills and skilled workers both within the firm and their ability to source them from the market. The second – Management Matters in New Zealand – benchmarked management practices in medium and large New Zealand manufacturers against their peers in 16 other countries. | MBIE |
A Good Worker is Hard to Find: Skills Shortages in New Zealand Firms  | Penny Mok, Geoff Mason, Philip Stevens, Jason Timmins | 2012 | This paper examines the determinants of firms’ skill shortages, using a specially-designed survey, the Business Strategy and Skills (BSS) module of the Business Operations Survey. We combine the BSS module with additional data on firms in the Statistics New Zealand’s prototype Longitudinal Business Database (LBD). We focus on vacancies that were hard-to-fill because the applicants lacked the necessary skills, qualification or experience - which we define as skill-related reasons (skill shortage vacancies). We also contrast these with vacancies that were hard-to-fill for non-skill-related reasons. | MBIE |
To Make or Buy (Skills): An Analysis of Training Decisions Using Microdata  | Geoff Mason, Peter Nunns, Penny Mok, Philip Stevens, Jason Timmins | 2011 | The purpose of this paper is to examine the impact of skill shortages on the supply of training within New Zealand firms. The study uses a specially designed survey, the Business Strategy and Skills (BSS) module of the Business Operations Survey 2008 (BOS 2008). The paper evaluates the impact of skills shortages on the incidence and intensity of training across firms. A unique feature of the BSS module is the ability to measure differences in training intensity for three types of staff: new staff; existing staff changing roles and existing staff for their existing roles. The paper also considers other factors such as firm size, previous performance, its ownership, its competitive environment and the occupational breakdown of its staff, that can impact on a firms decision to undertake training. We extend the analysis by including additional explanatory variables by combining the BSS module with data from other sections of the current and previous years BOS and the prototype Longitudinal Business Database (LBD). We use probit regression models to estimate the impact of skills shortages on the probability of a firm training staff and the proportion of staff trained controlling for a range of employer and employee factors. | MBIE |
Richard Fabling, Steven Stillman, Dave Maré | 2011 | We combine firm-level innovation data with area-level Census data to examine the relationship between local workforce characteristics, especially the presence of immigrants and local skills, and the likelihood of innovation by firms. We examine a range of innovation outcomes, and test the relationship for selected subgroups of firms. | Motu | |
The Impact of Immigration and Local Workforce Characteristics on Innovation | Richard Fabling, Steven Stillman, Dave Maré | 2011 | We combine firm-level microdata on innovation with area-level workforce characteristics to examine the relationship between local workforce characteristics, especially the presence of immigrants and local skills, and the likelihood of innovation by firms. We examine a range of innovation outcomes and test for the relationship for selected subgroups of firms. | Motu |
Richard Fabling | 2011 | High quality data are critical to Motu's research and we go to great lengths to ensure that the data we use are fit for the question at hand. Statistics New Zealand's prototype Longitudinal Business Database (LBD) is a prime example of data capable of providing valuable insights into numerous policy-relevant questions. This article discusses the ways two recent papers provide examples of how the richness of this data can be exploited. | Motu | |
Keeping it Together: Tracking Firms in New Zealand’s Longitudinal Business Database 
| Richard Fabling | 2011 | Having good longitudinal identifiers is important in empirical microeconomics, since researchers often need to be able to observe the same unit over time to make causal inferences. However, firm identifiers in Statistics New Zealand's Longitudinal Business Database can be "broken" by, among other things, changes in the legal status of the firm. This paper proposes a simple method for repairing broken firm identifiers, making use of existing plant migration data. We show that making such repairs materially reduces the apparent rate of business entry and exit, and allows real economic phenomena, such as small business incorporation, to be observed for the first time. | Motu |
The ‘Suite’ Smell of Success: Complementary Personnel Practices and Firm Performance | Richard Fabling, Arthur Grimes | 2009 | How do personnel practices affect firm performance? To examine this issue we use a panel of over 1,500 New Zealand firms, drawn from a diverse range of industries. The panel comprises respondents to official surveys of management practices in 2001 and 2005. These surveys ask a wide range of comparable qualitative questions covering organisational practices including human resource management (HRM). To this panel, we link longitudinal firm performance data from Statistics New Zealand's Longitudinal Business Database. | Motu |
Daniel J Graham, Dave Maré | 2009 | This paper analyses the relationship between firms' multi-factor productivity and the effective employment density of the areas where they operate. Quantifying these agglomeration elasticities is of central importance in the evaluation of the wider economic benefits of transport investments. We estimate agglomeration elasticities using the Statistics New Zealand prototype Longitudinal Business Database: a firm-level panel covering the period 1999 to 2006. We present separate estimates of agglomeration elasticities for specific industries and regions, and examine the interaction of agglomeration with capital, labour, and other inputs. | Motu | |
Entrepreneurship and aggregate merchandise trade growth in New Zealand  | Richard Fabling, Lynda Sanderson, | 2009 | We present a descriptive analysis of firm-level merchandise trade, focussing on the role of entrepreneurial exporting behaviour. We document two aspects of the dynamics of trade – the contribution of novel export activity to aggregate trade growth and, conversely, the substantial exit rates of new trade relationships. The unique contribution of this paper lies in the detailed and comprehensive data we have available on market and product choices. Specifically, we make use of shipment-level goods trade data, linked to information for the universe of economically active New Zealand manufacturers, to examine trade at the firm-level and at the product-country-firm nexus. Our growth decomposition and survival analysis suggest several themes: (a) novel market entry is a significant contributor to aggregate export growth; (b) the study of international entrepreneurial behaviour should encompass not just de novo entrants, but the broad range of trade innovations initiated by incumbent exporters; (c) much expansion in trade appears to be incremental in nature; (d) despite this, such innovations appear to be inherently risky; and (e) experience and scale appear to be key factors in overcoming these risks (or at least proxies for such factors). | RBNZ |
Some Rise by Sin, and Some by Virtue Fall: Firm Dynamics, Market Structure and Performance  | Richard Fabling, Lynda Sanderson, Philip Stevens, Arthur Grimes | 2008 | This paper investigates the microeconomic dynamics of the New Zealand economy using a powerful new SNZ-held dataset. For the first time, tax data covering operating performance and position (IR10), company income declarations (IR4) and sales & purchases (GST) have been combined with firm-level (LEED) employment data and Customs merchandise trade data to create a full coverage Longitudinal Business Database (LBD). We use this data to expand the available set of firm performance measures to include multi-factor productivity, profitability and export intensity. These and other performance variables are used to examine the distribution and dynamic of New Zealand firm performance, focussing on the characteristics of firms that display superior or inferior firm-level outcomes. | MBIE |
A Comparison of Qualitative and Quantitative Firm Performance Measures  | Richard Fabling, Philip Stevens, Arthur Grimes | 2008 | 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. | MBIE |
Over the Hedge? Exporters’ Optimal and Selective Hedging Choices  | Richard Fabling, Arthur Grimes | 2008 | How do exporting firms manage currency exposures? We examine this issue at the firm level using comprehensive data from the prototype Longitudinal Business Database recently developed by Statistics New Zealand. We use these data to test both optimal and selective hedging theories. Optimal hedging theory hypothesises that firms' hedging choices depend on the probability and cost of financial distress, underinvestment risks, scale, managerial risk aversion, information asymmetry, governance, ownership structures and tax rules. Recent literature suggests that some firms vary hedging positions relative to their optimal position in a selective attempt to "beat the market". We examine whether hedging behaviour is consistent with hypotheses derived from optimal hedging theories, and test whether hedging positions change (possibly sub-optimally) when the NZD/AUD is perceived to be "high" or "low" relative to an historical average. | Motu |
Richard Fabling, Arthur Grimes | 2008 | We use data derived from the Longitudinal Business Database (LBD) to analyse the currency denomination and hedging behaviour of New Zealand merchandise exporters.Published version: | MBIE | |
Labour Productivity in Auckland Firms  | Dave Maré | 2008 | This paper examines labour productivity in Auckland, New Zealand's largest city, using microdata from Statistics New Zealand's Prototype Longitudinal Business Database. It documents a sizeable productivity premium in Auckland, around half of which is due to industry composition. There is a cross sectional correlation between productivity and employment density, reflecting differences in both physical productivity and prices. This correlation is evident both within Auckland, and comparing Auckland with other areas. The relationship between changes in density and changes in productivity is less strong. The relationship between productivity and overall or own-industry employment density varies across industries, suggesting that the nature and extent of agglomeration benefits varies. | Motu |
Other papers and presentations
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The Performance of New Zealand Exporters: Some Firm-Level Evidence | Richard Fabling | 2007 | The presentation will conclude with a brief outline of planned work including understanding the impact of international engagement on firm performance, the effects of government policy targetting exporting, and migrant-trade linkages. | Motu |
Suliasi Vunibola, Jason Paul Mika, Matthew Roskruge | 2021 | This paper sets out our submission on the Productivity Commission’s final draft report on the inquiry into frontier firms focusing on Māori frontier firms. We draw upon current and previous research to support our analysis and advice. The inquiry adopts the OECD definition of frontier firms – those within the top 10% of firms’ productivity distribution in an industry. This definition brings around 30,000 firms into scope for this inquiry. Identifying Māori firms within this cohort becomes functionally complex. Some of the approaches of identifying Māori firms include business owners’ ethnicity, employees’ ethnicity, the nature of the product and service, or commercial and social enterprises operating with Māori values, philosophy, and tikanga (SNZ, 2016). The Commission recognises that there is no single agreed definition of a Māori business or Māori firm as the Māori economy comprises a range of organisational forms and structures under various legal frameworks. | NZPC | |
Hilary Devine, Tinh Doan, Kris Iyer, | 2012 | In this paper we decompose labour productivity growth in the New Zealand industries. Using the prototype Longitudinal Business Database (LBD), we measure the firm productivity growth and break it down to see what composes the growth. Our | MBIE | |
Tinh Doan, Hilary Devine, Peter Nunns, | 2012 | The creation of new firms and the death of existing firms is a fundamental part of the functioning of capitalist economies. In any given year, around one-fifth of firms have either been born or died. In this paper, we investigate patterns of firm entry and exit | MBIE | |
Hilary Devine, Tinh Doan, Kris Iyer, | 2012 | Using a panel dataset of 19,836 manufacturing firms from the prototype Longitudinal Business Database spanning the years 2000-09, this paper offers the first evidence on the nexus between productivity and competition in New Zealand. Two measures of competition are used: the Lerner index (LI) and the profit elasticity (PE) indicator. Productivity is computed allowing for imperfect competition. | MBIE | |
Just Good Friends? Relationship Banking and Access to Finance in New Zealand Firms | Philip Stevens | 2011 | In this paper we use information form the Business Finance Survey (BFS), matched to the prototype Longitudinal Business Database (LBD) to examine the issue of access to finance for New Zealand firms. The BFS was sponsored by the Ministry of Economic Development (MED) to provide information on the capital structure of businesses, the sources of finance they use and their recent financing experiences. In particular, it contains information on recent applications for debt and equity finance, the value of business assets being used as collateral for financing, and the length of the firm's relationship with its main bank or financial institution. One drawback of the BFS is that it presents only a snapshot. By linking it to the LBD we can examine the influence of firms' previous performance on the probability of applying for, and their success in obtaining, external finance. Moreover, we can use items from firms' financial accounts to examine the effective cost of borrowing over a longer period and for a dramatically larger sample of firms | MBIE |
Competition in New Zealand: An analysis using micro data  | Philip Stevens | 2009 | Understanding the relationship between competition and economic performance is critical to developing government policy and regulation to support a dynamic and growing economy. Recently it has been suggested that there exists an inverted U-Shaped relationship between competition and economic performance. Up to a certain point, increased competition stimulates more innovation as firms try to escape competition. However, innovation is often a costly activity and so requires the prospect of rents in order to be undertaken. Thus, it may be that in some sectors competition impedes innovation and growth, as Schumpeterian effects dominate and post-innovation rents are competed away. We currently have little or no information of the degree of competition in the majority of the sectors of the NZ economy and much less still of how this compares with other economies. This paper uses a rich source of information, the prototype Longitudinal Business Database, to examine the nature and extent of competition in New Zealand. Unlike most other studies in this area internationally, we have information on essentially the whole population of economically significant firms. Another innovation is that we have information on firms own perception of competition in a subset of firms. | MED |