Introduction: Firm Level Analysis With Administrative Data

• Published date: 01 January 2018
• Author: Elizabeth Gavin,Rob Davies,Landon Mcmillan,Channing Arndt
• DOI: http://doi.org/10.1111/saje.12183
• Date: 01 January 2018

INTRODUCTION: FIRM LEVEL ANALYSIS WITH

ADMINISTRATIVE DATA

CHANNING ARNDT *, ROB DAVIES

†

,ELIZABETH GAVIN

‡

AND LANDON MCMILLAN

§

Abstract

This special issue focuses on a collaborative effort between the National Treasury and the South

African Revenue Service (SARS) to employ administrative record data from SARS for economic

policy analysis. It contains six research articles plus a synthesis article designed to draw out poten-

tial policy implications and to place this research into a broader context. Exploitation of tax

administrative record data has become global best practice. We conclude that this effort demon-

strates strong prospects for developing a better understanding of the South African economy with

positive implications for economic policy formulation.

JEL Classif‌ication: H29, D21, O12

Keywords: Administrative record data, f‌irm level analysis, heterogeneity

1. BACKGROUND

The Economic Policy unit of the National Treasury and the World Institute for Develop-

ment Economics Research have partnered closely over the past 3 years on a program of

collaborative research and capacity building. This program sought to conduct research in

order to address the broad level economic ills besetting South Africa. These include very

slow or even negative real GDP per capita growth; low and slowing productivity growth;

stubbornly high unemployment among low skilled workers; and very high inequality in

consumption, income and wealth.

In this context, considerable effort was made to source and make available new data

permitting new research approaches. In this special issue, the focus is on a collaborative

effort with the South African Revenue Service (SARS) to employ administrative record

data from SARS for economic policy analysis. All six research articles featured in this

special issue rely principally on this administrative data. The data sets employed include

personal income tax, corporate income tax, and value added tax, which links to customs

records permitting examination of international trade issues. The data refer to the popu-

lation of employees and f‌irms operating within the formal sector. They permit analysis at

the level of the f‌irm, rather than sector, and highlight the high degree of heterogeneity

across f‌irms.

For a host of reasons, exploitation of tax administrative record data has clearly become

global best practice, and South Africa is, to our knowledge, the f‌irst country on the

African continent to mount a serious effort to employ these data for the purposes of

* Corresponding author: Senior Research Fellow, International Food Policy Research Institute,

1201 Eye St. NW, Washington DC 20005, USA. E-mail: c.arndt@cgiar.org

†

Independent Consultant.

‡

International Monetary Fund.

§

Landon McMillan Consulting.

V

C2018 UNU-WIDER. South African Journal of Economics published by John Wiley & Sons Ltd on behalf of

Economics Society of South Africa.

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial License, which

permits use, distribution and reproduction in any medium, provided the original work is properly cited and is not

used for commercial purposes. doi: 10.1111/saje.12183

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South African Journal of Economics Vol. 86:S1 January 2018

South African Journal

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