C H A P T ER 4
T H E L O NG S HA D O W O F I N F O R MA L I T Y
175
TABLE 4D.4 Regression: Labor productivity of formal and informal firms (1)
(2)
(3)
(4)
Informal firm: Yes 1 No 0
-1.400***
-0.648***
-1.131***
-1.200***
-1.008***
(0.091)
(0.184)
(0.131)
(0.121)
(0.160)
Firm age (logs)
0.120***
0.285***
0.118***
0.116**
0.137***
(0.045)
(0.053)
(0.045)
(0.045)
(0.045)
-0.102***
-0.119***
-0.056*
-0.104***
-0.108***
(0.027)
(0.027)
(0.032)
(0.028)
(0.028)
Manufacturing: Yes 1 No 0
-0.402***
-0.407***
-0.401***
-0.401***
-0.399***
(0.056)
(0.056)
(0.056)
(0.056)
(0.056)
Capital city: Yes 1 No 0
0.201***
0.190***
0.187***
0.394***
0.201***
(0.061)
(0.061)
(0.061)
(0.087)
(0.061)
Manager experience (logs, years)
0.094**
0.141***
0.107***
0.091**
0.190***
(0.040)
(0.041)
(0.040)
(0.040)
(0.055)
Firm size (logs, workers)
Informal firm * Firm age (logs)
(5)
-0.353*** (0.069)
Informal firm * Firm size (logs, workers)
-0.208*** (0.066)
Informal firm * Capital city: Yes 1 No 0
-0.360*** (0.114)
Informal firm * Manager experience (logs, years) Country fixed effects Constant
-0.176*** (0.060) Yes
Yes
Yes
Yes
Yes
9.013***
8.552***
8.859***
8.909***
8.748***
(0.131)
(0.164)
(0.149)
(0.139)
(0.162)
Number of observations
10,527
10,527
10,527
10,527
10,527
R-squared
0.291
0.296
0.293
0.293
0.292
Source: World Bank. Note: Ordinary least squares regression with labor productivity as dependent variable, as proxied by annual sales (in 2009 U.S. dollars) per worker, based on a sample using World Bank’s Enterprise Surveys data collected during 2007-14 for 4,036 informal firms and 7,558 formal firms in 18 countries. “Informal firm” is a dummy variable taking the value of 1 if a firm is unregistered and 0 otherwise. “Manufacturing” is a dummy variable taking the value of 1 if a firm operates in the manufacturing sector and 0 otherwise. “Capital city” is a dummy variable taking the value of 1 if a firm is located in the capital city and 0 otherwise. Standard errors in parenthesis. Significance is denoted by *** (1 percent), ** (5 percent), * (10 percent).
