A New Converter for Establishments from Japan's Census of Manufactures: 1993-2009

In this paper, we construct a new converter that creates panel data drawing from the Census of Manufactures of the Ministry of Economy, Trade and Industry. Previous work has utilized a converter based on the respondent statuses of surveyed establishments. Although this usual converter is advantageous because of its simplicity of being created, it is also seriously problematic in that establishments which initially refused to respond are regarded as having exited or bankrupt, even though they have since responded and are now treated as new entry establishments. This leads to serious statistical biases such as overestimating both the entry and exit rates and underestimating the agglomeration index. In order to correct such potential statistical biases, this paper introduces a way to create a converter based on all listed establishments which are included as the target of the survey from 1993 to 2009. As a result, we find that this new converter can improve the statistical biases, especially when estimating the entry ratio, exit ratio, and agglomeration index.