Exploiting Trade Engagement and Cost Structures to Improve the Quality of the LEHD Successor-Predecessor and T26 Employer Characteristics Files

This report details improvements to the quality of the LEHD Successor-Predecessor and T26 Employer Characteristics Files by exploiting information about trade engagement and cost structures of firms using data from the LFTTD and LBD. Specifically, with regards to the Successor-Predecessor File, we provide a dataset listing pairs of SEIN numbers from adjacent quarters that feature a sizable share of workers from the predecessor firm moving to the successor firm and either feature multiple common trading partner countries or shared, common cost structures, under the assumption that real successor businesses will tend to retain these characteristics. We also provide a dataset flagging pairs of SEINs that are currently linked by the Successor-Predecessor File that fail to meet these assumptions, as well as a set of programs/algorithms that generate these data products and which contain thresholds that can be tailored to the needs of LEHD researchers by weighing the potential for Type 1 vs. Type 2 error. Regarding the T26 Employer Characteristics File, we provide a firm-year level dataset that imputes domestic and international shares of input spending where these characteristics are currently unknown. Both sets of products increase the utility of these data for analysis of economic phenomena, particularly for firms that engage in some degree of international trade.