<u>Table A.1. Definitions Main Variables</u>

|Variable|Definition|
|---|---|
|Share High Educated Workers|Share of the workforce with more than the secondary education|
|Share of Skilled Occupations|Share of the workforce that are managers, professionals and non-production workers|
|Exporter|Dummy variable equal to 1 if the firm exports directly or indirectly|
|Foreign Ownership|Dummy variable equal to 1 if the firm has more than 10% of foreign capital|
|Technological Innovation|Dummy variable equal to 1 if the firm introduced a new technology that substantially changed the way the main product was produced in the<br>three years prior to the survey|
|Age Firm|Years since the firm started operations|
|Public Ownership|Dummy variable equal to 1 if the government ownes a positive amount of the firm's capital|
|Managerial Education|Dummy variable equal to 1 if the manager completed at least the secondary education|
|Sales per employee|Firm total sales divided by the number of total employees|
|City > 1mln individuals|Dummy variable equal to 1 if the firm is located in a city with population greater than 1 million individuals other than capital city|
|City 250k-1mln individuals|Dummy variable equal to 1 if the firm is located in a city with population between 250 thousand and 1 million individuals|
|City 50k-250k individuals|Dummy variable equal to 1 if the firm is located in a city with population between 50 thousand and 250 thousand individuals|
|City > 50k individuals|Dummy variable equal to 1 if the firm is located in a city with population between smaller than 50 thousand individuals|
|Access to External Finance|Dummy variable equal to 1 if a firm finances its investments through commercial banks or leasing arrangements.|
|ISO certification|Dummy if the firm has an ISO certification.|
|R&D Activities|Dummy variable equal to 1 if the firm reports having design and R&D expenditures (e.g., labor costs with R&D personnel, materials or<br>subcontracting costs).|
|R&D/Sales|Share of R&D expenditure divided by the firm's total sales|
|Computer Use|Dummy equal to 1 if the firm uses computers on their daily activities|
|Email/Internet Use|Dummy equal to 1 if the firm uses internet or email in their daily activities|
|High-Tech Manufacturing Sectors|Dummy equal to 1 if the firm operates in the auto or auto-component, chemical and pharmaceutical, electronic or metals and machinery<br>industries.|
|Low-Tech Manufacturing Sectors|Dummy equal to 1 if the firm operates in the beverage, food, garment, leather, non-metallic/plastic materials, paper, other manufacturing,<br>textiles, or in the wood and furniture industries. These definitions follow Parisi et al. (2006).|
|Low Income Countries|Dummy variable equal to 1 if firm is located in Cambodia or Vietnam|
|Low-Middle Income Countries|Dummy variable equal to 1 if the firm is located in China, Indonesia, Philippines or Thailand.|
|Upper-Middle Income Countries|Dummy variable equal to 1 if the firm is located in Malaysia.|
|Country-Industry Fixed Effects|Dummy variable equal to 1 for each combination of country and 3-digit sector of activity.|
|Country-Industry-Size Fixed Effects|Dummy variable equal to 1 for each combination of country, 3-digit sector of activity and size category. We consider 5 size categories: micro (1-<br>10 workers), small(10-50 workers), medium(50-100 workers), large(100-250 workers)and verylarge(>250 workers).|

Source: _Enterprise Surveys_ (World Bank).