Monitoring Markets & Sectors

Transcription

1 Monitoring Markets & Sectors Indicators for Market Monitoring Stijn Kelchtermans HU Brussel International Expert Workshop Brussels, 26 March 200 Project overview Outline Goals, Challenges & Approaches for the composite indicator sources & indicator construction Distributions of indicators (by NACE level, year) Summary & discussion Project overview Outline Goals, Challenges & Approaches for the composite indicator sources & indicator construction Distributions of indicators (by NACE level, year) Summary & discussion

2 Project Overview Goals Integration of data sources made available by the FPS Economy (Belgium) in order to obtain a database that allows assessing the functioning of sectors (e.g. economic importance, competition, innovation ) integration Analytical tool(s) A methodology that combines different data in order to analyze the functioning of sectors Project Overview Challenges - Definition of performance - Functioning of sectors/markets (competition, integration, innovation ) - Definition of markets - Relevant economic market sector data - Include regulated/non-market sectors? - Interpretation of indicators - Validity of indicators (scope of data sources open economy) - Benchmarking performance - Combination of indicators into an overall assessment Economic Markets versus Sectors Example - MANUFACTURE OF FOOD PRODUCTS AND BEVERAGES. - Production, processing and preserving of meat and meat products.3 - Processing and preserving of fruit and vegetables. - Processing and preserving of potatoes.32 - Manufacture of fruit and vegetable juice 2

3 - Composite indicator Project Overview Approaches - Multi-dimensional performance measure - Micro data - Multi-level sector analysis (beyond 2-digit NACE) - Aggregation of indicators - Endogenous weighting (BoD) to aggregate indicators (see next presentation) - Entry threshold ratio approach for competition in local markets (see final presentation) - Persistence of profits (subject to data availability) Project overview Outline Goals, Challenges & Approaches for the composite indicator sources & indicator construction Distributions of indicators (by NACE level, year) Summary & discussion Sources CI s = m j j = m = w Y j j w Y s j B j 3

4 Availability Sep 2009 Signing of the confidentiality contracts Mar 200 Back casting of NACE codes finished Oct 2009 Access to micro data Mar 200 granted 6 indicators computed Nov 2009 Access to PRODCOM Dec indicators computed; preliminary data on local markets Jan 2009 Project start 26/3/200 International expert workshop Apr 20 Project end Construction of the Indicators Steps in constructing the PCM-indicator Overview of Indicators Type of Indicator Indicator Source Period Structure Dimension Barriers to Entry/Exit Churn rate VAT - ( ) Capital Intensity: Tangible Fixed Assets VAT & BNB divided by firm turnover ( ) Concentration Average concentration over a number of VAT periods (C4, C8, HHI) ( ) Openness Import penetration ratio BNB COMEXT, VAT ( ) Conduct Dimension Competitive Behavior Volatility of market shares VAT 995- ( ) Performance Dimension Allocative Efficiency Changes in price-cost margins VAT & BNB ( ) Productive Efficiency Labor productivity growth VAT & BNB ( ) (gross value added per hour worked) Dynamic Efficiency R&D Intensity SBS, CIS ( ) VAT = VAT declaration data; BNB = accounting data; IMP/EXP = import/export data (BNB); PRODCOM = the PRODCOM survey for the manufacturing sectors 4

5 onglist l Indicators in the EC Methodology Stage one: Screening Economic importance (share in value added, employment, consumption) Adjustment capacity (interlinkages, ICT user/producer) Signs of market malfunctioning (labor productivity growth, consumer dissatisfaction) Stage two: Analysis of selected sectors Regulation (regulation impact indicator - RII) Integration with EU, RoW (import penetration, market thickness, price dispersion, cross-border M&A) Competition (PCM, C8, turbulence ratio, cartel cases) Innovation (R&D intensity, quality of labor, ICT, patents, MFP) EC Methodology Example flagged Sectors () in the Belgian Economy Per-indicator comparison against the average across (Belgian) sectors or against corresponding 2-digit EU/US average Project overview Outline Goals, Challenges & Approaches for the composite indicator sources & indicator construction Distributions of indicators (by NACE level, year) Summary & discussion 5

6 Churn Rate Definition Source: VAT Period: - Interpretation NACE Description Churn rate () Below average Manufacture of food products and beverages 0,074 x 25 Manufacture of rubber and plastic products 0,23 x 30 Manufacture of office machinery and computers 0,328 Manufacture of electrical machinery and apparatus 0,99 Mean across 2 digit sectors 8 EC methodology : market turbulence ( Competition) is compared against corresponding 2-digit sector in the US (European exercise) or against the average of manufacturing or service sectors (Belgian exercise) Total number of sectors = 59 Churn Rate (, 2/3/4-digit NACE) : Manufacture of accumulators 3 NACE 3-digit Total number of sectors = 220 sectors % of 2 3: Insulated wire and cable 4: vegetable and animal oils NACE 2 NACE 3 25:Rubber products NACE 4-digit Total number of sectors = : Builders' ware of plastic 30; : refined oils and edible fats 0, 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9 NACE 4 Churn rate - Manufacture of food products and beverages 30 - Manufacture of office machinery and computers 25 - Manufacture of rubber and plastic products - Manufacture of electrical machinery and apparatus Churn Rate (, 2-digit NACE) : 3 : & sectors 25: % of 2 0, 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9 25: : 30: 30: Churn rate - Manufacture of food products and beverages 30 - Manufacture of office machinery and computers 25 - Manufacture of rubber and plastic products - Manufacture of electrical machinery and apparatus 6

7 Churn Rate (, 3-digit NACE) sectors 3: 2 0, 0,2 0,3 0,4 0,5 0,6 % of 0,7 0,8 0,9 3: Churn rate 3 - Manufacture of insulated wire and cable Churn Rate (, 4-digit NACE) : sectors 40: 300: % of 2 0, 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9 92: 25: 300: 25: 92: Churn rate 92 - Production of ethyl alcohol from ferment Manufacture of office machinery 25 - Manufacture of rubber tyres and tubes 40 - Manufacture of accumulators and primary cells Concentration Definition Source: VAT Period: Interpretation t ti NACE Description HHI () Above average Manufacture of food products and beverages 0,00 25 Manufacture of rubber and plastic products 0, Manufacture of office machinery and computers 0,433 x Manufacture of electrical machinery and apparatus 0,037 Mean across 2 digit sectors 0,00 EC methodology : concentration ( Competition) is compared against the average of manufacturing or service sectors (European & Belgian exercise) 7

8 Concentration: HHI (, 2/3/4-digit NACE) Total number of sectors = 59 % of sectors NACE 3-digit Total number of sectors = NACE 2 NACE 3 NACE 4 2 NACE 4-digit Total number of sectors = ,0 0,20 0,30 0,40 0,50 0,60 0,70 0,80 0,90,00 HHI - Manufacture of food products and beverages 25 - Manufacture of rubber and plastic products - Manufacture of electrical machinery and apparatus 2 Processing and preserving of fish and fish products 25 Manufacture of rubber products 3 - Manufacture of insulated wire and cable 42 - Production of ethyl alcohol from fermented materials 25 - Manufacture of rubber tires and tubes 40 - Manufacture of accumulators, primary cells and primary batteries Concentration: HHI (2005, 2-digit NACE) % of sectors 6 () 5 () () () () () () 30 () ,0 0,20 0,30 0,40 0,50 0,60 0,70 0,80 0,90,00 - Manufacture of food products and beverages 30 - Manufacture of office machinery and computers 25 - Manufacture of rubber and plastic products - Manufacture of electrical machinery and apparatus HHI Concentration: HHI (2005, 4-digit NACE) % of sectors () () () 3002 () 252 () 252 () 95 () () 0,0 0,20 0,30 0,40 0,50 0,60 0,70 0,80 0,90,00 - HHI 95 - Manufacture of other non-distilled fermented beverages Retreading and rebuilding of rubber tires Manufacture of computers and other information processing equipment 6- Manufacture of electrical equipment for engines and vehicles n.e.c. 8

9 Import Penetration Definition (Eurostat, 2003) Source: COMEXT & PRODCOM Period: Aggregation from product-level (PRODCOM and CN codes) to sector level (NACE codes) Interpretation NACE Description Import penetration ratio () Below average Manufacture of food products and beverages 0,586 x 25 Manufacture of rubber and plastic products,073 x 30 Manufacture of office machinery and computers 2,857 Manufacture of electrical machinery and apparatus 0,777 x Mean across 2 digit sectors,647 EC methodology : import penetration ( Integration) is compared against the EU average (European exercise) or Belgian average (Belgian exercise) of manufacturing or service sectors. Import Penetration (, 2/3/4-digit NACE) Total number of sectors = : Retreading and rebuilding of rubber tires 3 30: Insulated wire and cable NACE 3-digit Total number of sectors = 9 NACE 4-digit Total number of sectors = 203 % of sectors NACE 2 NACE NACE 4 5: Lighting equipment 30; :Rubber products 0,5,5 2 2,5 3 3,5 Import penetration - Manufacture of food products and beverages 30 - Manufacture of office machinery and computers 25 - Manufacture of rubber and plastic products - Manufacture of electrical machinery and apparatus Analysis comprises only manufacturing sectors due to the specificity of data Capital Intensity Definition K j CAPINTs = δj sales j S j Source: BNB ACC Period: with K j = tangible fixed assets for firm j, δ j = output share of firm j Interpretation NACE Description Capital intensity () Above average Manufacture of food products and beverages 0,49 25 Manufacture of rubber and plastic products 0,34 30 Manufacture of office machinery and computers 0,36 Manufacture of electrical machinery and apparatus 0,088 Mean across 2 digit sectors 0,837 9

10 Capital Intensity (, 2/3/4-digit NACE) % of sectors Total number of sectors = NACE 3-digit Total number of sectors = , 300 NACE 2 NACE 3 NACE 4 NACE 4-digit Total number of sectors = ,0 0,20 0,30 0,40 0,50 0,60 0,70 0,80 0,90,00 Cap. Int. - Manufacture of food products and beverages 30 - Manufacture of office machinery and computers 25 - Manufacture of rubber and plastic products - Manufacture of electrical machinery and apparatus 2 Processing and preserving of fish and fish products 25 Manufacture of rubber products Manufacture of office machinery and computers 3 - Manufacture of insulated wire and cable 92 - Production of ethyl alcohol from materials Manufacture of builders' ware of plastic fermented Manufacture of accumulators, primary cells and primary batteries Volatility of Market Shares Definition Source: VAT Period: 995- Interpretation NACE Description Volatility of market shares () Below average Manufacture of food products and beverages 0,094 x 25 Manufacture of rubber and plastic products 0,08 x 30 Manufacture of office machinery and computers 0,43 x Manufacture of electrical machinery and apparatus 0,65 x Mean across 2 digit sectors 0,230 Volatility of Market Shares Year Total number of sectors = : Rubber products NACE 3-digit Year Total number of sectors = 220 % of sec ctors 2 NACE 2 NACE 3 NACE 4 NACE 4-digit Year Total number of sectors = 52 0, 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0, ;30: Insulated wire and cable 25: Manufacture of rubber tires and tubes Volatility index - Manufacture of food products and beverages 30 - Manufacture of office machinery and computers 25 - Manufacture of rubber and plastic products - Manufacture of electrical machinery and apparatus 0

11 Price-Cost Margins Definition Source: VAT & BNB ACC Period: Interpretation NACE Description price cost margin () Above average Manufacture of food products and beverages 0,02 x 25 Manufacture of rubber and plastic products 0,62 x 30 Manufacture of office machinery and computers 0,223 x Manufacture of electrical machinery and apparatus 0,098 x Mean across 2 digit sectors 0,0 EC methodology : price-cost margins ( Competition) are compared against the US benchmark (European & Belgian exercise) Price-Cost Margins (, 2/3/4-digit NACE) Total number of sectors = 56 % of sectors NACE 2 NACE 3 NACE 4 NACE 3-digit Total number of sectors = , NACE 4-digit Total number of sectors = 474-0, , ,0-0,00 0,0 0,20 0,30 0,40 PCM - Manufacture of food products and beverages 30 - Manufacture of office machinery and computers 25 - Manufacture of rubber and plastic products - Manufacture of electrical machinery and apparatus 4 - Manufacture of vegetable and animal oils and fats 25 Manufacture of rubber products Manufacture of office machinery and computers 3 - Manufacture of insulated wire and cable 95 - Manufacture of other non-distilled beverages Manufacture of builders' ware of plastic fermented 3002 Manufacture of computers and other information processing equipment 40 - Manufacture of accumulators, primary cells and primary batteries Project overview Outline Goals, Challenges & Approaches for the composite indicator sources & indicator construction Distributions of indicators (by NACE level, year) Summary & discussion

12 Summary Main Characteristics of Composite Indicator Approach - Multi-dimensional performance measure - Micro data - Multi-level sector analysis (beyond 2-digit NACE) - Aggregation of indicators - Endogenous weighting (BoD) to aggregate indicators (see next presentation) Discussion Scope of the composite indicator Exclusion of non-business sectors Priorities for additional indicators Capture more sector idiosyncrasies (e.g. technology life cycles) Definition of indicators Assess reliability of indicators (higher weights for more reliable indicators) Define indicators as deviations from foreign benchmarks (but infeasible at detailed sector levels?) 2