The Dutch BR and profiling Jean Ritzen Statistics Netherlands 19th International Roundtable on Business Survey Frames Oct 19, 2005 RT19, Profiling

Top-Down Profiling in the Netherlands Important source for this presentation: Top-Down Profiling in the Netherlands Peter Struijs Statistics Netherlands Workshop on Profiling, Heerlen, 2-3 June 2005 Oct 19, 2005 RT19, Profiling

Content The Dutch BR in general Why profiling? Context of profiling New profiling instructions delineation of the enterprise group the operational structure of the enterprise group delineation of the enterprises linking enterprises to administrative units Conclusion: recommended practices Oct 19, 2005 RT19, Profiling

Some figures (1) Oct 19, 2005 RT19, Profiling

Oct 19, 2005 RT19, Profiling

Some figures (2) Oct 19, 2005 RT19, Profiling

Some figures (3) Oct 19, 2005 RT19, Profiling

Oct 19, 2005 RT19, Profiling

Sources for BR updating In use: Single (administrative) business register Chambers of commerce Taxation autorities Social security (All above are administrative (legal or fiscal) oriented) Feed back from surveys Potential additional information Dun and Breadstreet Internet Other Oct 19, 2005 RT19, Profiling

Oct 19, 2005 RT19, Profiling

Updating Strategy Effort depends on statistical impact of units More effort for complex units Respond to problems: respondent requests, questions from statistical departments, processing signals 4500 units in scope of “profiling”, active or reactive; 18 staff (2005) Method: bottom-up profiling Oct 19, 2005 RT19, Profiling

Oct 19, 2005 RT19, Profiling

Some more figures Registered units in the SN-BR: Source units: about 2 million Legal units: about 1.5 million Enterprises: about 960 thousand Enterprise groups: 915 thousand Published number of enterprises about 715 thousand (among other reasons because of correction estimates) Oct 19, 2005 RT19, Profiling

Profiling large enterprise groups Oct 19, 2005 RT19, Profiling

A case, source: newspaper Dsm.com Oct 19, 2005 RT19, Profiling

Why Profiling? Administrative data sources track administrative units, not enterprises Many large enterprises are constructions because of: taxation payroll & social security liability control subsidies Oct 19, 2005 RT19, Profiling

Benefits of Profiling Higher quality of statistics Lower response burden International comparability Compliance with EU law Oct 19, 2005 RT19, Profiling

“Profiling” Results in today BR legal units enterprise groups enterprises 20 – 29  195  717 30 – 39  88  974 40 – 59  64  903 60 – 99  44  833 100 and more  37  970 Oct 19, 2005 RT19, Profiling

Need for Change Changes in data sources: Quality concerns: new administrative register with unique identification of businesses availability of internet Quality concerns: results not plausible in some cases methods not uniformly applied need to measure profiling quality Need for higher efficiency Oct 19, 2005 RT19, Profiling

Two Approaches to Profiling (1) Bottom-up approach: Start with legal units and build enterprises Top-down approach: Start with the enterprise group and divide it into enterprises; then relate them to legal units Oct 19, 2005 RT19, Profiling

Two Approaches to Profiling (2) Bottom-up and top-down approach compared: Top-down approach more efficient: number of legal units may be very large administrative data: timelag and quality problem Risk of bias with bottom-up approach: do the enterprises recognise themselves? response problems Oct 19, 2005 RT19, Profiling

Top down profiling: preamble Start profiling of multinational enterprise groups from a global perspective! Oct 19, 2005 RT19, Profiling

Top-Down Profiling: Step 1 Aim: delineate the enterprise group All resident legal units linked by direct or indirect control Sources: administrative data, financial reports, statistical departments For step 1 no contact with respondent Oct 19, 2005 RT19, Profiling

Source problems in defining the group, some examples Oct 19, 2005 RT19, Profiling

Source problems in defining the group, some examples (2) Oct 19, 2005 RT19, Profiling

Top-Down Profiling: Step 2 Aim: investigate operational structure Aspects: operational entities (internet!) flows of goods and services (internal and external) degree of autonomy availability of accounts But: try to ignore the administrative structure! Oct 19, 2005 RT19, Profiling

Top-Down Profiling: Step 3 Aim: delineate the enterprises Steps: identify market-oriented operational entities (orientation to outside the group) form clusters of such entities based on operational dependence allocate all other operational entities to these clusters Oct 19, 2005 RT19, Profiling

Top-Down Profiling: Step 4 Aim: link enterprises with administrative units Possible relationships: one to one enterprise consists of several adm units enterprise is part of adm unit many to many Oct 19, 2005 RT19, Profiling

Oct 19, 2005 RT19, Profiling Ent 1 Ent 2 EG 1 SU11B LU 2 JLU3 LU 4 Source 1 BSource2 Source 3 Source 4 SU 6 Oct 19, 2005 RT19, Profiling

Communication with Enterprise group Check results with group at high level Are the conclusions of the profile actions in line with EG-perception Make in co-operation with statistical departments arrangements on the statistical units and collection of data Be aware of continuity effects related with changes in the structuring of units Oct 19, 2005 RT19, Profiling

Quality Aspects Profile report: Test of new method showed that: standardised exhaustive information on the four steps strict separation of facts and conclusions Test of new method showed that: the method works method is complex (good instructions and training needed) profile report must concentrate on changes profilers need good data access Oct 19, 2005 RT19, Profiling

Recommended Practices Apply top-down profiling to the enterprise groups with the highest statistical impact Take an economic, not an administrative approach Centralise profiling activities, based on central data access Centralise data collection on largest enterprise groups and register all contacts centrally Base quality control on standardised profiling reports Oct 19, 2005 RT19, Profiling

And globally? Strong need for a harmonised interpretation of the definition of the enterprise group and of the enterprise Strong need for a broad harmonised quality policy for statistical units Meanwhile: development and share of best practices Started initiatives in European context Oct 19, 2005 RT19, Profiling