1. Clotilde Masson Insee, Business Statisticss Directorate Economic Classifications Division TSG-ISIC Geneva 18/05/2016 Towards identifying FGPs in the Business Register

2. Towards identifying FGPs in the Business Register 2 TSG-ISIC Geneva 18/05/2016 Framework : the European FGPs Task Force The Task Force has identified a list of indicators Low employment and high turnover Low employment and high profit Low employment and high employment costs Low capital expenditures Low materials or fuels inventories Low working in progress inventory Low inventory for finished products High purchases of services and high sell of goods High purchases of services and low purchases of goods for resell If Principal and Contractor are in EU: VAT imports are higher than Intrastat High production + low employment Change from production of goods to non-production of goods Structure of employment in terms of ISCO and ISCED showing no occupations in production. The absence of workers can help us to identify a possible FGP

3. Towards identifying FGPs in the Business Register 3 TSG-ISIC Geneva 18/05/2016 Framework : the European FGPs Task Force We focused on some of them Low employment and high turnover Low employment and high profit Low employment and high employment costs Low capital expenditures Low materials or fuels inventories Low working in progress inventory Low inventory for finished products High purchases of services and high sell of goods High purchases of services and low purchases of goods for resell If Principal and Contractor are in EU: VAT imports are higher than Intrastat High production + low employment Change from production of goods to non-production of goods Structure of employment in terms of ISCO and ISCED showing no occupations in production. The absence of workers can help us to identify a possible FGP

4. Towards identifying FGPs in the Business Register 4 TSG-ISIC Geneva 18/05/2016 Tax information and social data Using the tax declarations and social declarations, many data are available for each company We have investigated a file of 4.1 million companies : the exhaustive scope of the french business statistics, containing - accounting information (sales, purchases, turnover, operating charges, assets, inventories..) - social data (number of employees, categories of employees) - economic/statistic characteristics (category of enterprise, legal category, NACE code, type of tax reporting)

5. Towards identifying FGPs in the Business Register 5 TSG-ISIC Geneva 18/05/2016 Reducing the scope of study Legal category we hold only the corporate entities & trade companies Micro- enterprises 95,5% SMEs 4.3% Others 0.2% Others 59% corporate entities & trade companies 41% (individual companies, self-entrepreneurs, farmers, associations, liberal professions, craftsmen, retailers,...) Micro-enterprises employ fewer than 10 people and their annual sales or total asets do not exceed €2 million Category of enterprise we exclude the micro-enterprises

6. Towards identifying FGPs in the Business Register 6 TSG-ISIC Geneva 18/05/2016 Selection among activity sectors We hold a selection of NACE codes : - manufacturing (div. 13-17 and 20-33 and group 38.3) - trade (div. 45, 46, 47) - "technical" activities (div. 58, 59, 62, 70, 71, 72, 74)

7. Towards identifying FGPs in the Business Register 7 TSG-ISIC Geneva 18/05/2016 We end up with roughly 77500 legal units split into 6 activity-size subsets :

8. Towards identifying FGPs in the Business Register 8 TSG-ISIC Geneva 18/05/2016 We calculate ratios in order to relate "high" and "low" to the size of the enterprise Ratio_outsourcing = outsourcing charges other external operating charges x 100 Ratio_purchase_raw_mat = purchase of raw material total operating charges - salary expenditures x 100 Ratio_purchase_goods = purchase of goods for resale total operating charges - salary expenditures x 100 Ratio_resale_goods = sale of goods purchased for resale number of employees (FTP) Ratio_sale_prod_goods = sale of producted goods number of employees (FTP) Ratio_skilled_employ = number of "managers and highly skilled employees" (FTP) number of employees (FTP) x 100

9. Towards identifying FGPs in the Business Register 9 TSG-ISIC Geneva 18/05/2016 What does "high" or "low" mean ? We look at the statistical distribution of each ratio in each subset Percentiles of the ratios in the " Trade-Small " subset Ratio_outsourcingRatio_purchase_raw_matRatio_purchase_goods Ratio_resale_goodsRatio_sale_prod_goodsRatio_skilled_employ

10. Towards identifying FGPs in the Business Register 10 TSG-ISIC Geneva 18/05/2016 What does "high" or "low" mean ? Percentiles of the ratios in the " Manuf-Small " subset Ratio_outsourcingRatio_purchase_raw_matRatio_purchase_goods Ratio_resale_goodsRatio_sale_prod_goodsRatio_skilled_employ We look at the statistical distribution of each ratio in each subset

11. Towards identifying FGPs in the Business Register 11 TSG-ISIC Geneva 18/05/2016 What does "high" or "low" mean ? For a given variable, we assume that " high " refers to the last percentiles and " low " refers to the first percentiles This allows to define thresholds for each ratio, in each subset

12. Towards identifying FGPs in the Business Register 12 TSG-ISIC Geneva 18/05/2016 Establishing thresholds Ratio_outsourcing Ratio_purchase_raw_mat Ratio_purchase_goods Ratio_(resale_goods or sale_prod_goods) Ratio_skilled_employ last decile (10%) two first deciles (20%) two last deciles (20%)

13. Towards identifying FGPs in the Business Register 13 TSG-ISIC Geneva 18/05/2016 Determining the threshold values for the ratios Thresholds values for the " Manuf-Small " subset Ratio_outsourcingRatio_purchase_raw_matRatio_purchase_goods Ratio_resale_goodsRatio_sale_prod_goodsRatio_skilled_employ

14. Towards identifying FGPs in the Business Register 14 TSG-ISIC Geneva 18/05/2016 Establishing thresholds When applying those thresolds jointly, we get 138 "potential FGPs" out of the 77500 companies of our scope These138 companies total - 16 900 M€ turnover - 37 100 employees the 4 largest of them total - 13 631 M€ turnover (13 100 in NACE 30.30 activity 540 in NACE 46.69 activity) - 31 900 employees (25 400 in NACE 30.30 activity 6 500 in NACE 46.69 activity)

15. Towards identifying FGPs in the Business Register 15 TSG-ISIC Geneva 18/05/2016 Towards further investigations The method may be applied using different sets of variables, of ratios, of thresholds, in different partitions of the busines register... The first outcome is that even when considering a small number of criteria and with wide thresholds the "potential FGPs" don't appear to be numerous

16. Thanks for your attention ! Contact Clotilde Masson Tél. : 01 41 17 69 55 Courriel : clotilde.masson@insee.fr Insee 18 bd Adolphe-Pinard 75675 Paris Cedex 14 www.insee.fr Informations statistiques : www.insee.fr / Contacter l’Insee 09 72 72 4000 (coût d’un appel local) du lundi au vendredi de 9h00 à 17h00 Towards identifying FGPs