Kauffman Firm Survey (KFS) - Baseline/First/Second/Third/Fourth Follow-Ups: Study Metadata Documentation

1712 Pages Posted: 31 Oct 2007 Last revised: 12 May 2010

See all articles by David DesRoches

David DesRoches

Mathematica Policy Research, Inc.

Alicia Robb

University of Colorado at Boulder; Next Wave Impact; Federal Reserve Banks - Federal Reserve Bank of Atlanta

Timothy M. Mulcahy

University of Chicago - National Opinion Research Center (NORC)

Date Written: April 12, 2010


The Kauffman Firm Survey (KFS) - is the largest longitudinal study of new businesses ever embarked upon. The panel of businesses was created by using a random sample from Dun & Bradstreet’s (D&B) database list of new businesses started in 2004, which totaled roughly two hundred fifty-thousand such businesses. The KFS oversampled these businesses based on the intensity of research and development employment in the businesses’ primary industries. The KFS sought to create a panel that included new businesses founded by a person or team of people, purchases of existing businesses by a new ownership team, and purchases of franchises. To this end, the KFS excluded D&B records for businesses that were wholly owned subsidiaries of existing businesses, businesses inherited from someone else, and not-for-profit organizations. Also, previous research on new businesses has reported variability in how business founders perceive when their businesses started operations. Therefore, a series of questions were asked of business owners about indicators of business activity and whether these were conducted for the first time in the reference year (2004). These indicators included:

* Payment of state unemployment (UI) taxes * Payment of Federal Insurance Contributions Act (FICA) taxes * Presence of a legal status for the business * Use of an Employer Identification Number (EIN) * Use of Schedule C to report business income on a personal tax return

To be “eligible” for the KFS, at least one of these activities had to have been performed in 2004 and none performed in a prior year. Businesses were excluded if they had an EIN, schedule C income, a legal form, or paid state UI or FICA taxes prior to 2004.

A random sample of 32,469 businesses was released for data collection on the baseline survey, conducted between July 2005 and July 2006. A total of 17,258 businesses were screened for eligibility, resulting in the identification of 6,030 eligible businesses (a 35% eligibility rate). Interviews were completed with principals of 4,928 businesses that started operations in 2004, which translates to a 43% weighted response rate using the American Association for Public Opinion Research (AAPOR) response rate calculation 3. A self-administered Web survey and Computer Assisted Telephone Interviewing (CATI) were used for data collection, and KFS respondents were paid $50 to complete the interview. CATI completes accounted for 3,781 (77%) and Web completes accounted for 1,147 (23%) of the total interviews. The results across sampling strata show that 2,034 interviews were completed in the two high-technology strata. The remaining 2,894 interviews were completed among non-high-tech businesses.

The sample for the first follow-up survey consisted of the 4,928 businesses that completed the baseline survey. The first follow-up was conducted between June 2006 and January 2007, during which 3,998 interviews were completed and 369 businesses were identified as out of business. This translates to an 88% weighted response rate using AAPOR response rate 1. As with the baseline survey, respondents were paid $50 to complete the interview, which was offered either on the Web or through CATI. During the first follow-up, a significantly larger percentage of interviews were completed through the Web survey (2,366, or 59%) than in the baseline, with CATI completes accounting for 41% (1,632 interviews).

The second follow-up survey was conducted among 4,523 KFS businesses. This included businesses that completed both the baseline and first follow-up surveys, or those not able to be interviewed during the first follow-up. Businesses identified as no longer operating during the first follow-up were excluded, as were a small number that adamantly refused to participate in the first follow-up. The second follow-up was conducted between May and December 2007, during which 3,390 interviews were completed and 406 businesses were identified as no longer operating. This translates to an 82% unweighted response rate using AAPOR response rate 1. As with the two previous surveys, respondents were paid $50 to complete the interview, which was offered either on the Web or through CATI. During the second follow-up, 63% of the interviews (2,127) were completed through the Web survey, with CATI completes accounting for 37% (1,263 interviews).

The third follow-up data collection closely mirrored the collections of the first two follow-ups. Data collection began on June 24, 2008, and concluded on December 23, 2008. Some respondent fatigue was observed and a response rate dropped slightly to 78 percent (unweighted). 2,915 interviews were completed. There was a slight increase in the percentage of respondents who completed the Web survey (65 percent in the Third Follow-Up compared with 63 percent in the Second Follow-Up). For the Third Follow-Up, the ?panel maintenance packet? consisted of a colorful 2009 calendar with the study name and contact information printed on it. As with previous rounds, respondents also received a $50 incentive payment for completing the survey.

Since the Baseline Survey had established eligibility for all the businesses in the panel, the only eligibility criterion for the 3,867 businesses included in the Fourth Follow-Up was whether the business was still in operation. Specifically, the remaining businesses were those that completed the Baseline Survey (4,928), minus those identified as permanently out of business during the previous followups (1,061). Businesses identified as temporarily out of business in the previous followups were included in the Fourth Follow-Up sample in case they had resumed operations since the previous interview.

As in previous rounds, panel members were contacted initially by email and invited to complete the KFS web survey. Those businesses without email addresses, or those that did not respond to the initial message, were sent an invitation through U.S. mail. As in prior waves, respondents were offered a post-paid $50 incentive for completing the Fourth Follow-Up. Among the remaining eligible businesses, 2,606 interviews were completed, which resulted in a weighted response rate of 83 percent. As in the two previous follow-up surveys, most interviews were completed on the web (71 percent), the rest (29 percent) through computer-assisted telephone interviewing (CATI).

Keywords: Kauffman Firm Survey, New Business Startups, Entrepreneurship, Innovation

JEL Classification: G1, G2, L1, L2, L6, L8, M1, M2, M5, O4, P1, R3

Suggested Citation

DesRoches, David and Robb, Alicia and Mulcahy, Timothy M., Kauffman Firm Survey (KFS) - Baseline/First/Second/Third/Fourth Follow-Ups: Study Metadata Documentation (April 12, 2010). Available at SSRN: https://ssrn.com/abstract=1024312 or http://dx.doi.org/10.2139/ssrn.1024312

David DesRoches

Mathematica Policy Research, Inc. ( email )

P.O. Box 2393
Princeton, NJ 08543-2393
United States
609-275-2366 (Phone)

HOME PAGE: http://www.mathematica-mpr.com

Alicia Robb (Contact Author)

University of Colorado at Boulder ( email )

Leeds Business School
Boulder, CO 80309
United States

Next Wave Impact ( email )

7455 Park Lane Road
Longmount, CO 80503
United States

Federal Reserve Banks - Federal Reserve Bank of Atlanta

1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States

Timothy M. Mulcahy

University of Chicago - National Opinion Research Center (NORC) ( email )

55 E. Monroe, Ste. 4800
Chicago, IL 60603
United States

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