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Classifying Firms with Text Mining

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  • Giacomo Caterini

Abstract

Statistics on the births, deaths and survival rates of firms are crucial pieces of information, as they enter as an input in the computation of GDP, the identification of each sector’s contribution to the economy, and the assessment of gross job creation and destruction rates. Official statistics on firm demography are made available only several months after data collection and storage, however. Furthermore, unprocessed and untimely administrative data can lead to a misrepresentation of the life-cycle stage of a firm. In this paper we implement an automated version of Eurostat’s algorithm aimed at distinguishing true startup endeavors from the resurrection of pre-existing but apparently defunct firms. The potential gains from combining machine learning, natural language processing and econometric tools for pre- processing and analyzing granular data are exposed, and a machine learning method predicting reactivations of deceptively dead firms is proposed.

Suggested Citation

  • Giacomo Caterini, 2018. "Classifying Firms with Text Mining," DEM Working Papers 2018/09, Department of Economics and Management.
    • Handle: RePEc:trn:utwprg:2018/09
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Business Demography; Classification; Text Mining;
    All these keywords.

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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