Abstract for:Grounding Simulations on Firm-Level Data Sets - An extended approach for evidence-based policy design
System dynamics is a powerful methodology that can be used to develop policies and support decision makers. Especially for economists and managers, system dynamics delivers a strong base for creating strategies for different scenarios. Despite this, databases and statistical analysis remain the dominant research design for political consultancy in the field of industrial manufacturing. Generally, research focuses on only one methodology, either statistical analysis or system dynamics modeling. This paper tries to close the gap between quantitative empirical analysis and system dynamics simulation. We present a concept for linking a representative firm-level database of industrial manufacturing with a system dynamics model. Our aim is to combine the strengths of both methodologies: We apply firm-level data (ex-post analysis) that capture historical dynamics and use them in a system dynamics model to forecast prospective dynamics and trends (ex-ante analysis). We use the empirical database and simulation runs to develop policies.