# How to get the 3-digit SIC code from Datastream and merge ISIC to SIC?

When trying to replicate a paper, I faced the problem in merging two datasets.

When merging an ISIC-related dataset (dataset A) to a SIC-related Datastream dataset (Dataset B), I faced a problem with the three-digit SIC code.

A paper shows how to match these two datasets:

Export data used to construct Export market leniency laws measure comes from CEPII TradeProd Database that has bilateral trade flows for more than 200 countries at ISIC industry level over 1980-2006. We match them to the three-digit SIC and average over the respective values within the three-digit SIC in case multiple three-digit ISIC codes match to three-digit SIC codes.

I have two questions as below:

1> How to get the 3-digit SIC from Datastream. Thompson Reuter described that item WC07023 is SIC Code 3, but when looking at this, I saw mainly 4-digit code. I show a part of my dataset B as below

As can be seen, in column WC07023, even column WC07022 (SIC Code 2), we have 4-digit codes rather than three. And this is the ISIC 3-digit code from the dataset A

2> And could you explain to me the author's approach based on this sentence, it is quite ambiguous to me:

We match them to the three-digit SIC and average over the respective values within the three-digit SIC in case multiple three-digit ISIC codes match to three-digit SIC codes.

As can be deduced from reviewing some of the 4 digit SIC codes, the first 3 digits of the 4 digit code indicate the group. Here are some examples:

Therefore, to get the 3 digit SIC code from column WC07023, simply extract the first 3 digits.

Reviewing the data definition:

A company may have up to eight SIC codes assigned to it or as little as one depending on the number of business segments that make up the company's revenue.

Therefore, a single company may belong to multiple industry groups.

It is worth consider what codes the authors are referring to (described here):

• SIC: Standard Industrial Classification
• ISIC: International Standard Industrial Classification
• NAICS: North American Industrial Classification System

Each of these coding systems are different. You need a table to convert between any two. As far as I can tell, there is no official conversion table between SIC and ISIC. However, the US Census Bureau offers some conversion tables.

As you might expect, the conversion between systems conceived in different decades is going to be messy. Codes map to multiple codes in another coding scheme.

For example, SIC 581 maps to NAICS 722 and 711 which in turn maps to ISIC codes including 900, 552, 562 and 563, among others.

This dataset from Macalester College providers a simplification.

SIC 581 maps to ISIC 552

In my opinion, it is not totally clear what mathematical operation is being performed, but it is likely intended to account for this issue. Only the authors of the study can know for sure, since exact details are not provided in the manuscript. The corresponding author's email address is provided on the journal website.

• From the ISIC 3-digit code from the dataset A as describe above, it seems that the data will be shinked drastically, sin't it? Jun 7 at 21:06