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Amendments to the Rule for Mergers and Spin-offs Involving Sample Enterprises of the Tankan

October 31, 2016
Research and Statistics Department
Bank of Japan

The Bank of Japan, as a rule, currently treats mergers and spin-offs involving sample enterprises of the Tankan by using the enterprise with the largest capital as the core enterprise.1 However, with sales data of population enterprises now available in the Economic Census -- released jointly by the Ministry of Internal Affairs and Communications and by the Ministry of Economy, Trade and Industry -- we made attempts to estimate the population total using the enterprise with the largest sales volume as the core enterprise to incorporate the impact of mergers and spin-offs. Here, we found that the new method based on sales volumes had a smaller impact on the estimates than the current method based on capital. So from now on, mergers and spin-offs will be treated by using the enterprise with the largest sales volume as the core enterprise rather than that with the largest capital.

Details on the procedures are described below. The new rule is to take effect from the December 2016 survey.

  1. For details, see "Sample Design and Sample Maintenance of TANKAN" (June 7, 2004).

Treatment of Mergers and Spin-offs

In principle, the Bank takes the following procedures for mergers and spin-offs involving sample enterprises of the Tankan.

Case 1: Mergers

When the core enterprise -- the enterprise with the largest sales volume -- is a sample enterprise prior to the merger, the merged enterprise is included into the sample. Specifically, in cases where there is a merger between a sample enterprise and another sample enterprise or a non-sample enterprise with a smaller sales volume, the merged enterprise is included into the sample. On the other hand, when there is a merger between a sample enterprise and a non-sample enterprise with a larger sales volume, the merged enterprise is excluded from the sample.

Case 2: Spin-offs

Only the core enterprise -- with the largest sales volume -- is included into the sample after the spin-off.

However, all enterprises -- the core enterprise as well as other spin-offs -- are included into the sample when (i) the core enterprise and other spin-offs are grouped into the same stratum for population estimation and (ii) the impact on estimated sales or fixed investment turns out to be small with the inclusion of these enterprises into the sample.

Note that the following two exceptional rules -- applied when the impact of mergers and spin-offs on the estimates is above a certain level, such as large-scale mergers and spin-offs -- of the distribution method and the subsequent inclusion of spin-offs are not subject to this amendment.

Inquiries

Business Survey, Research and Statistics Department

E-mail : post.rsd5@boj.or.jp