The Statistical Measurement of Business Conditions for Small Entrepreneurs

44 Pages Posted: 17 Feb 2017

See all articles by Inna Lola

Inna Lola

National Research University Higher School of Economics (Moscow)

Date Written: February 17, 2017

Abstract

A specific feature of business conditions surveys describing actual and expected short-term trends of company financial and economic activities is the non-quantitative nature of the relevant data. To facilitate its interpretation and visualisation for various user groups, the respondents’ answers are typically aggregated into simple and composite indicators (CI).

This study proposes, tests, and validates conceptual and information measurement hypotheses for building and applying such CI, which provide an integrated assessment of small entrepreneur (SE) economic sentiment. These CI demonstrate a strong, statistically significant correlation with growth cycles of reference statistical indicators. A theoretical model for building CI to measure business conditions for SE is presented, and a relevant toolset is described.

Industry-specific features of building business conditions indicators are illustrated using the retail and wholesale sectors as examples. New opportunities for the visualisation and analytical presentation of the cyclic profiles of indicators are demonstrated, based on tracers tracking their phase-to-phase movement. New information and analysis-related areas are identified for the application of nonparametric data to estimate the current state and expected development of SE.

Keywords: small entrepreneurship, business conditions, composite indicators, cycle tracer, business conditions surveys

JEL Classification: E32, C81, C82

Suggested Citation

Lola, Inna, The Statistical Measurement of Business Conditions for Small Entrepreneurs (February 17, 2017). Higher School of Economics Research Paper No. WP BRP 71/STI/2017, Available at SSRN: https://ssrn.com/abstract=2919239 or http://dx.doi.org/10.2139/ssrn.2919239

Inna Lola (Contact Author)

National Research University Higher School of Economics (Moscow) ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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