4D.4 Regression: Labor productivity of formal and informal firms 4D.5 Regression: Labor productivity of formal firms facing informal

TABLE 4D.4 Regression: Labor productivity of formal and informal firms

(1) (2) (3) (4) (5)

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) Firm size (logs, workers) -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

Capital city: Yes 1 No 0 -0.402*** -0.407*** -0.401*** -0.401*** -0.399*** (0.056) (0.056) (0.056) (0.056) (0.056) 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)

Informal firm * Firm age (logs) -0.353*** (0.069)

Informal firm * Firm size (logs, workers) Informal firm * Capital city: Yes 1 No 0 -0.208*** (0.066)

-0.360*** (0.114)

Informal firm * Manager experience (logs, years)

-0.176*** (0.060) Country fixed effects Yes Yes Yes Yes Yes Constant 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).