GVC & TiVa Research Plan

Predominant Purpose Statement (PPS)
Draft March 26, 2015
DMS ID 6907751 "The Business Dynamics of Multinational Corporations and Global Value
Chains"
Persons with FTI Access
Anthony Caruso – U.S. Census Bureau, Economy Wide Statistics Division (EWD)
Letha Clinton - U.S. Census Bureau, EWD
Roberta Gibson - U.S. Census Bureau, EWD
James Lawrence - U.S. Census Bureau, EWD
Javier Miranda – U.S. Census Bureau, Center for Economic Studies (CES)
Fariha Kamal – U.S. Census Bureau, CES
Teresa Fort– U.S. Census Bureau, CES
Special Sworn Employees:
James Fetzer- Bureau of Economic Statistics (BEA)
Marilyn Ibarra-Caton- BEA
Derrick Jenniges- BEA
Raymond Mataloni- BEA
Erich Strassner- BEA
Tom Howells- BEA
Jeff Young- BEA
Paul Rhodes- BEA
Additional researchers may be added to this project after it commences as needs dictate. In
accordance with the Census Bureau – IRS Criteria Agreement of June 2012, the Census Bureau
will notify IRS Statistics of Income of any additions and/or subtractions of Special Sworn Status
individuals within five business days of the action.
Duration – 60 months
Locations
Suitland Federal Complex
Funding – None (internal project)
Background
U.S. multinational enterprises (MNEs) account for less than 1% of all U.S. businesses, however,
they accounted for one-fifth of total U.S. employment in private industries in 2011;
MNE-associated U.S. exports of goods represented about 55% of total U.S. exports of goods in

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2009; and they accounted for about two-thirds of the research and development (R&D) spending
by all industrial R&D performers in the United States in 2000.
The importance of U.S. MNEs in the U.S. economy provides impetus to research the creation of
new sets of public use statistics to inform policy makers and researchers of the
contributing/changing role of U.S. MNEs in the various productivity-enhancing activities such as
R&D and trade. These productivity-enhancing activities ultimately contribute to higher average
wages for employees of U.S. multinationals (direct effect), as well as multifaceted “spillover”
effects to geographically proximate and/or upstream and downstream firms/establishments
(indirect effects).
The Census Bureau and the Bureau of Economic Analysis (BEA) will collaborate in joint research
better to understand and disseminate information about MNEs—to include information on Global
Value Chains (GVCs) and Factoryless Goods Producers (FGPs), which are closely associated with
MNEs. Many MNEs are organized by GVCs, which are created when firms break up the
production process into discrete tasks, some or all of which are performed in different geographic
locations. FGPs are producers that outsource all of their manufacturing. A key feature of the
project is that several Census Bureau datasets will be linked to and compared with data from BEA,
A major goal is to investigate the feasibility of two potential new products based on linked
BEA-Census data on MNEs:
•
•

Extended Supply Use Tables, based primarily on new tabulations produced by the Census
Bureau for BEA
New MNE tables on Business Dynamics Statistics, which will be part of the Census
Bureau’s new budget initiative related to the Longitudinal Business Database (LBD).

Several Census Bureau datasets are essential for the work. Census Bureau data from the Economic
Censuses, the annual economic surveys, the Annual Capital Expenditures survey, and the Business
Research & Development and Innovations Survey are required to measure the domestic
production activities and sourcing patterns of U.S. firms. BEA data on the operations of MNEs and
U.S. international trade in services and the Census Bureau data on foreign trade are required to
measure the international aspects of those sourcing patterns. The Census Longitudinal Business
Database is needed to facilitate the construction of a time series panel of data in order to track
changes over time. The Standard Statistical Establishment Listing, or Business Register, is
required to facilitate record linking.
The research will use data from the Economic Census that have been linked to the foreign trade
transactions data. The Economic Census will provide product detail, the revenues from and
expenses for contract work, and the responses to the special inquiries that ask whether the
establishment designed, engineered, or formulated the product being produced or sold. For
multinational enterprises, the BEA data will provide additional detail on whether contract
manufacturing services were purchased within the United States or from outside. These data will
be used to identify firms that likely purchased manufacturing services from foreign firms. Then,
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the product and country detail in the foreign transactions data will be used to identify types of
products and patterns of trade consistent with the purchase of such manufacturing services. The
data could also be used to identify U.S. firms that provided manufacturing services to foreign firms
and the associated products and patterns of trade.
Most multinationals are large firms. Therefore, this project relies most heavily on data collected
directly by the Census Bureau and BEA, rather than on Federal Tax Information. Linkages will be
conducted using Employer Identification Numbers collected by BEA and the Census Bureau.
Name and address matching will be used to augment matching where there are differences across
the databases.
During the 60-month duration of the project the researchers would develop methods for linking
data from the two agencies, conduct numerous comparisons in order better to understand the data
collected by each agency, research and develop prototypes for the proposed new tables, and work
through thorny issues related to multi-agency disclosure review. Production of any official
statistics would take place under a new project or under an approved modification of an existing
project. This research will also produce technical and research papers on MNEs, and on topics
closely associated with MNEs such as GVCs and FGPs.
Criteria
The predominant purpose of this study is to increase the utility of Title 13, Chapter 5 data of the
Census Bureau by meeting the criteria listed below and as described.
Understanding and/or improving the quality of data produced through a Title 13, Chapter 5
survey, census, or estimate.
The Census Bureau is publishing new enterprise-level statistics, including statistics on MNEs,
based on information from the Business Register’s Company Organization Survey (COS), Forms
NC-98001 and NC-99001. The survey covers several MNE-related topics: foreign ownership,
revenue from sales to foreign subsidiaries, intellectual property, and contract manufacturing
services.
Comparisons between Census Bureau and BEA data would help the Census Bureau better to
understand the quality of these statistics. Specifically, BEA’s data on the operations of U.S. MNEs
will allow the activities and locations of foreign affiliates that provide manufacturing services to
their parents to be identified. Using the data on foreign affiliates’ sales to their U.S. parents could
also shed light on the fees that U.S. parents pay for these activities. The Census Bureau cannot
currently use BEA data to make improvements to enterprise-level statistics through editing,
imputation or replacement; however, BEA data may be used to assess the quality of the data we
collect.

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Leading to new or improved methodology to collect, measure, or tabulate a Title 13, Chapter 5
survey, census, or estimate.
We expect this project to lead directly to improved methodology to measure FGPs, which are
often MNEs, in the Economic Census. Currently, the Census Bureau and BEA are working
independently better to understand FGPs and to develop an FGP classification for the 2017 North
American Industry Classification System (NAICS) revision—which will have a direct bearing on
questionnaire content for the 2017 Economic Census. The two agencies share bi-monthly progress
reports but do not collaborate directly. The ability to use linked data to compare data on FGPs
across the two agencies will accelerate and enhance this important work, in time for questionnaire
production for the 2017 Economic Census.
In addition, the Census Bureau currently collects data on exports from selected service industries
in the Economic Census. Combined data from the Economic Census and Trade in Services from
BEA will present a more comprehensive picture of exports in the U.S. For example, Census is
developing prototype tables on Business Dynamics Statistics for exporting firms (BDS-XF).
Exporting is currently limited only to goods which is collected by Census, not services.
Combining BEA and Census data would allow us to investigate a new joint data product for all
exporting firms.
Preparing estimates of population and characteristics of population as authorized under Title
13, Chapter 5.
A key goal of this project is to create prototypes for two new data products created from linked
Census Bureau and BEA data.
Extended Supply Use Tables: The Census Bureau currently provides a special tabulation to BEA
for production of the Supply Use Tables as part of the national accounts. This project will allow
Census and BEA to determine methods that can be used to implement the new international
standards for classifying, measuring the activities of FGPs and measuring trade in goods and
services associated with GVCs. A primary output of this project will be prototype Extended
Supply Use Tables derived from combined BEA and Census matched data. In the future, this will
likely lead to new special tabulations produced by the Census Bureau as part of its Title 13
programs.
New MNE tables on Business Dynamics Statistics: Although the BEA publishes MNE annual
statistics (employment, R&D, value added, capital expenditure, sales etc.) for U.S. parents (as well
as foreign affiliates of U.S. parents, and U.S. affiliates of foreign parents), there are currently no
statistics on domestic job creation and destruction, plant births and shutdowns of U.S. MNEs.
Moreover, BEA data does not allow a comparison of MNEs with the rest of the economy since it
only collects information on MNEs. The strength of a BDS-like product for MNEs would allow
not only to produce new statistics on job and establishment dynamics, but also a rich comparison
with the various segments of the economy such as other domestic establishments, or international
traders, etc. A longer term goal of this project is to prototype a BDS-MNE data product.
Requested Datasets
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FTI Datasets
Only the following Federal Tax return Information (FTI) items from the following files will be
needed by the researcher(s) to conduct this project.
Annual Capital Expenditures Survey (ACES), 1997-2012, and 2013-2018 as available
FTI:
TE
TVS
SW
LFO
EIN
ST
COU
CFN
IND

Description:
Total Employment
Total Value of Shipments (IRS Receipts)
Salaries and Wages (IRS Payroll)
Legal Form of Organization
Employer Identification Number
State
County
Census File Number (contains EIN)
Industry Classification (NAICS)

Annual Retail Trade Survey (ARTS), 1997-2012, and 2013-2018 as available
FTI:
TE
TVS
SW
LFO
EIN
ST
COU
CFN
IND

Description:
Total Employment
Total Value of Shipments (IRS Receipts)
Salaries and Wages (IRS Payroll)
Legal Form of Organization
Employer Identification Number
State
County
Census File Number (contains EIN)
Industry Classification (NAICS)

Annual Wholesale Trade Survey (AWTS), 1997-2012, and 2013-2018 as available
FTI:
TE
TVS
SW
LFO
EIN
ST
COU
CFN
IND

Description:
Total Employment
Total Value of Shipments (IRS Receipts)
Salaries and Wages (IRS Payroll)
Legal Form of Organization
Employer Identification Number
State
County
Census File Number (contains EIN)
Industry Classification (NAICS)

5

Annual Survey of Manufactures (ASM), 1998-2011, and 2013-2018 as available (non
economic census years)
FTI:
TE
TVS
SW
LFO
EIN
ST
COU
CFN
IND

Description:
Total Employment
Total Value of Shipments (IRS Receipts)
Salaries and Wages (IRS Payroll)
Legal Form of Organization
Employer Identification Number
State
County
Census File Number (contains EIN)
Industry Classification (NAICS)

Business Expenses Survey (BES), 1997 and 2002
FTI:
TE
TVS
SW
LFO
EIN
ST
COU
CFN
IND

Description:
Total Employment
Total Value of Shipments (IRS Receipts)
Salaries and Wages (IRS Payroll)
Legal Form of Organization
Employer Identification Number
State
County
Census File Number (contains EIN)
Industry Classification (NAICS)

Business R&D and Innovation Survey (BRDIS and SIRD), 1997-2012, and 2013-2018 as
available
FTI:
TE
TVS
SW
LFO
EIN
ST
COU
CFN
IND

Description:
Total Employment
Total Value of Shipments (IRS Receipts)
Salaries and Wages (IRS Payroll)
Legal Form of Organization
Employer Identification Number
State
County
Census File Number (contains EIN)
Industry Classification (NAICS)

.
Census of Construction Industries (CCN), 1997, 2002, 2007, and 2012 and 2017 as available
FTI:
TE

Description:
Total Employment
6

TVS
SW
LFO
EIN
ST
COU
CFN
IND

Shipments/Sales/Receipts (IRS Receipts)
Annual Payroll (IRS Payroll)
Legal Form of Organization
Employer Identification Number
State
County
Census File Number (contains EIN)
Industry Classification (NAICS)

Census of Finance, Insurance, and Real Estate (CFI), 1997, 2002, 2007, and 2012 and 2017 as
available
FTI:
TE
TVS
SW
LFO
EIN
ST
COU
CFN
IND

Description:
Total Employment
Shipments/Sales/Receipts (IRS Receipts)
Annual Payroll (IRS Payroll)
Legal Form of Organization
Employer Identification Number
State
County
Census File Number (contains EIN)
Industry Classification (NAICS)

Economic Census of Island Areas (CIA), 1997, 2002, 2007, and2012 and 2017 as available

FTI:
EIN
CFN
LFO
IND
ST
COU
TE
SW
TVS

Description:
Employer Identification Number
Census File Number (Includes EIN)
Legal Form of Organization
Industry Classification (SIC/NAICS)
State
County
Total Employment
Annual Payroll (IRS Payroll)
Shipments/Sales/Receipts (IRS Receipts)

Census of Manufactures (CMF), 1997, 2002, 2007, and 2012 and 2017 as available
FTI:
TE
TVS
SW
LFO
EIN

Description:
Total Employment
Total Value of Shipments (IRS Receipts)
Salaries and Wages (IRS Payroll)
Legal Form of Organization
Employer Identification Number
7

ST
COU
CFN
IND

State
County
Census File Number (contains EIN)
Industry Classification (NAICS)

Census of Mining (CMI), 1997, 2002, 2007, and 2012 and 2017 as available
FTI:
TE
TVS
SW
LFO
EIN
ST
COU
CFN
IND

Description:
Total Employment
Shipments/Sales/Receipts (IRS Receipts)
Annual Payroll (IRS Payroll)
Legal Form of Organization
Employer Identification Number
State
County
Census File Number (contains EIN)
Industry Classification (NAICS)

Census of Retail Trade (CRT), 1997, 2002, 2007, and 2012 and 2017 as available
FTI:
TE
TVS
SW
LFO
EIN
ST
COU
CFN
IND

Description:
Total Employment
Shipments/Sales/Receipts (IRS Receipts)
Annual Payroll (IRS Payroll)
Legal Form of Organization
Employer Identification Number
State
County
Census File Number (contains EIN)
Industry Classification (NAICS)

Census of Services (CSR), 1997, 2002, 2007, and 2012 and 2017 as available
FTI:
TE
TVS
SW
LFO
EIN
ST
COU
CFN
IND

Description:
Total Employment
Shipments/Sales/Receipts (IRS Receipts)
Annual Payroll (IRS Payroll)
Legal Form of Organization
Employer Identification Number
State
County
Census File Number (contains EIN)
Industry Classification (NAICS)

Census of Transportation, Communications, and Utilities (CUT), 1997, 2002, 2007, and 2012
and 2017 as available
8

FTI:
TE
TVS
SW
LFO
EIN
ST
COU
CFN
IND

Description:
Total Employment
Shipments/Sales/Receipts (IRS Receipts)
Annual Payroll (IRS Payroll)
Legal Form of Organization
Employer Identification Number
State
County
Census File Number (contains EIN)
Industry Classification (NAICS)

Census of Wholesale Trade (CWH), 1997, 2002, 2007, and 2012 and 2017 as available
FTI:
TE
TVS
SW
LFO
EIN
ST
COU
CFN
IND

Description:
Total Employment
Shipments/Sales/Receipts (IRS Receipts)
Annual Payroll (IRS Payroll)
Legal Form of Organization
Employer Identification Number
State
County
Census File Number (contains EIN)
Industry Classification (NAICS)

.
Longitudinal Foreign Trade Transactions Database (LFTTD), 1997-2013, and 2014-2018 as
available
FTI:
EIN
NM

Description:
Employer Identification Number
Business Name

Longitudinal Business Database (LBD), 1997-2012, and 2013-2018 as available
FTI:
TE
SW
LFO
ST
COU
ZIP
CFN
IND

Description:
Total Employment
Salaries and Wages (IRS Payroll)
Legal Form of Organization
State
County
Zip Code
Census File Number (contains EIN)
Industry Classification (SIC/NAICS)

Services Annual Survey (SAS), 1997-2013 and 2014-2017 as available
FTI:

Description:
9

TE
TVS
SW
LFO
EIN
ST
COU
CFN
IND

Total Employment
Total Value of Shipments (IRS Receipts)
Salaries and Wages (IRS Payroll)
Legal Form of Organization
Employer Identification Number
State
County
Census File Number (contains EIN)
Industry Classification (NAICS)

Standard Statistical Establishment Listing (SSL, or Business Register), 1997-2012, and
2013-2018 as available
FTI:
ADD
SW
LFO
ST
COU
ZIP
CFN
IND
TVS
TE
NM

Description:
Mailing Address
Salaries and Wages (IRS Payroll)
Legal Form of Organization
State
County
Zip Code
Census File Number (contains EIN)
Industry Classification (SIC/NAICS)
Shipments (IRS Receipts)
Total Employment
Business Name

Census Bureau Datasets
None
User Provided Datasets
•
•
•
•

BEA, Annual and Benchmark Surveys of US Direct Investment Abroad (USDIA)
BEA, Annual and Benchmark Surveys of Foreign Direct Investment in the United States
(FDIUS)
BEA, Quarterly and Benchmark Surveys of Transactions in Selected Services and
Intellectual Property with Foreign Persons
Private External Datasets on Multinationals (e.g. WorldBase, Lexis-Nexis)

Need and Use of FTI
FTI

Datasets that include the FTI

Description

ADD

SSL

Mailing Address
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This field will be used for name and address matching between the SSL and the name and address
information in the BEA data. The address will be standardized and used as one component of the
matching routine. This variable will be used for linkage when there are mismatches using the
EIN variable.
CFN

ACES, ARTS, AWTS, ASM, BES, BRDIS, CCN, CFI, CIA, CMF, CMI, CRT, CSR,
CUT, CWH, LBD, SAS, SSL
Census File Number (contains
EIN)

This field is used to link establishments across the Census datasets, particularly in early years prior
to the Business Register redesign in 2001.
COU

ACES, ARTS, AWTS, ASM, BES, BRDIS, CCN, CFI, CIA, CMF, CMI, CRT, CSR,
CUT, CWH, LBD, SAS, SSL
County

County will be used to construct regions for subnational tabulations of business dynamics,
counties can be aggregated up the MSA or other higher levels for disclosure avoidance reasons.
Greater geographic detail is one possible path to expand the program.
EIN

ACES, ARTS, AWTS, ASM, BES, BRDIS, CCN, CFI, CIA, CMF, CMI, CRT, CSR,
CUT, CWH, LBD, LFTTD, SAS, SSL
Employer Identification
Number

This field is necessary to link businesses over time and across Census datasets, and to link BEA
firm level data to the Census Bureau’s Business Register. That link file can then be used to match
to all Census Bureau datasets using other internal census identifiers like CFN and SURVUID.
IND

ACES, ARTS, AWTS, ASM, BES, BRDIS, CCN, CFI, CIA, CMF, CMI, CRT, CSR,
CUT, CWH, LBD, SAS, SSL
Industry (NAICS)

This field will be used for constructing industry level statistics in the extended supply use tables
and business dynamics statistics tables. Industry controls will be used in regression estimates, and
cross-industry differences in business dynamics and firm level heterogeneity in contract
manufacturing and global engagement will be examined.
LFO

ACES, ARTS, AWTS, ASM, BES, BRDIS, CCN, CFI, CIA, CMF, CMI, CRT, CSR,
CUT, CWH, LBD, SAS, SSL
Legal Form of Organization

Differences in business dynamics across legal forms will be examined.
NM

SSL, LFTTD

Business Name

Necessary for name and address matching between SSL and BEA data. It will be used as one
component of the matching routine.

11

SW

ACES, ARTS, AWTS, ASM, BES, BRDIS, CCN, CFI, CMF, CIA, CMI, CRT, CSR,
CUT, CWH, LBD, SAS, SSL
Salary and Wages/Annual Payroll
(IRS Payroll)

This is a primary measure of firm and establishment total labor costs that will tabbed in extended
supply use tables by several firm types derived using BEA multinational data.

ST

ACES, ARTS, AWTS, ASM, BES, BRDIS, CCN, CFI, CIA, CMF, CMI, CRT, CSR,
CUT, CWH, LBD, SAS, SSL
State

State will be used to construct state level measures of business dynamics. It will also be used in
combination with city, street address, and zip code to determine the employee’s county of
residence.
TE

ACES, ARTS, AWTS, ASM, BES, BRDIS, CCN, CFI, CIA, CMF, CMI, CRT, CSR,
CUT, CWH, LBD, SAS, SSL
Total Employment

Employment is a primary measure of firm and establishment size, and in differenced form will
measure firm growth.
TVS

ACES, ARTS, AWTS, ASM, BES, BRDIS, CCN, CFI, CIA, CMF, CMI, CRT, CSR,
CUT, CWH, LBD, SAS, SSL
Total Value of Shipments

Total value of shipments is used as a measure of firm and establishment revenue and sales.
Revenue can be used as an alternative measure of firm size. Labor productivity (sales per worker)
will be compared when including vs. excluding contract labor inputs.
ZIP

LBD, SSL

Zipcode

ZIP will be used in combination with city, street address, and state to improve the quality of name
and address matching.

Project Completion
The researcher(s) will provide the Census Bureau with annual progress reports on this multi-year
project. After this project is completed, the researcher(s) will produce a CES Working Paper and
related research papers for conference presentation and/or journal publication. They will also
produce a CES technical memorandum summarizing the key findings pertinent to Census Bureau
Title 13, Chapter 5 programs. In addition, the researcher(s) will produce a Post Project
Certification (PPC) summarizing whether and how the criteria described in the project proposal's
Predominant Purpose Statement (PPS), as well as any others, were or were not met.

12

Project Timeline
The proposed duration of the project is 5 years.

Task
1
X
X
X

Link BEA and Census data for 2012
Link BEA and Census data for 2007, 2002
Recommendations for new data collections related to factory-less goods
producers in the 2017 Economic Census
Submit annual progress report to Census Bureau
X
Summary report of ESP findings comparing USDIA and FDIUS to BR and
COS
Use linked data sets to analyze the types of firms that tend to import
manufacturing services
Use linked data sets to construct a supply and use table for 2012 following
initial specifications
Draft paper discussing findings from supply and use table for 2012 following
initial specifications
Construct supply and use tables for other years and following alternative
specifications
Use linked data sets to evaluate different methods for estimating import use
matrices by industry
Submit annual progress report to Census Bureau
Create prototype BDS-MNE tables for internal review
Create prototype enhanced BDS-XF tables for internal review
Draft paper on proposed methods to estimate import use matrices by industry
Link BEA and Census data for 1997
Draft paper comparing the results from different specifications of supply and
use tables and providing recommendations for preferred specification
Evaluate discrepancies between BEA and Census data on imports of
manufacturing services
Create prototype BDS-MNE tables for external use and review
Submit annual progress report to Census Bureau
Finalize paper on proposed methods to estimate import use matrices by
industry
Finalize paper comparing the results from different specifications of supply
and use tables and providing recommendations for preferred specification
Prepare internal report on the state of data collection on imported
manufacturing services and provide recommendations for any additional data
collection that may be needed
Submit annual progress report to Census Bureau
Create prototype enhanced BDS-XF tables for external use and review
Revise paper on proposed methods to estimate import use matrices by industry
to address referee reports from journal
Revise paper comparing the results from different specifications of supply and
use tables and providing recommendations for preferred specification to
address referee reports from journal
13

2

Year
3 4

5

X

X
X
X
X
X X
X X
X
X X
X X
X
X X
X
X
X X X
X
X
X
X

X
X X
X
X

Link BEA and Census data for 2017
Submit Post-Project Certification document

X
X

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