and in the remaining cases we chose the owner who was reported as the owner in most of the waves in which we observed the firm, or, if this was the case for both owners, who had the lowest household roster number.

Finally, we excluded firms for which we could not identify at least one owner among the household members who were in the IFLS sample.

# _Mexican Family Life Survey (MxFLS)_

The Mexican Family Life Survey (MxFLS) is a publicly available multi-purpose panel survey conducted in Mexico. It surveys 8,400 households (35,000 individuals) and is representative of the Mexican population at the national, urban, rural, and regional level. Further details on study design and the data can be obtained in Rubalcava and Teruel (2013). Three rounds of data have been collected (2002, 2005-2006, and 2009-2012) and we included all three of them in our sample.

We identified household businesses in the MxFLS using the non-farm business modules of the different survey waves. A household was coded as operating a business if there was a household member who had owned or shared a non-agricultural business during the past 12 months preceding the survey. Owners were identified as those household members who took the most important decisions regarding the business. Given that only their relationship to the respondent was reported, as opposed to their survey identification number, owners could only be uniquely identified, if they were either the respondent or his or her spouse.

Given the household panel structure of the MxFLS, we also extracted information on firms that were not operating in round 1, but in round 2, and use two baselines for the analysis of firm dynamics over time. Taking round 1 as baseline, we observe horizons of three and 7.5 years to rounds 2 and 3, respectively. We observe a horizon of 4.5 years from round 2 to round 3 with round 2 as the baseline. Since horizons using rounds 1 and 2 as baseline differ, we do not pool together data for the same observation period, but increase the sample with information on different horizons with this procedure.

In order to code whether a business observed at baseline survived or not, and in the latter case, whether a new firm was started, we needed to match reported businesses between rounds based on a number of business characteristics, as the MxFLS does not link household businesses from round to round. For simplification, we decided to only include firms of households in our sample who never operated more than one enterprise in any of the three survey rounds.

Taking round 1 [round 2] as our baseline, and round 2 [round 3] as follow-up rounds, we then coded the business reported at baseline as surviving, if a business was reported in the followup round, and:

- start dates (i.e. year the business was started) were identical across the two waves; or

- at least one of the business owners (person(s) taking the most important decisions regarding the business) was the same across the two waves, and the business reported in the follow-up round was not started after 2001 [in or after the year in which the baseline survey was conducted].

We coded the business reported at baseline as closed, if:

- no business was reported in a subsequent round.

Otherwise, we coded _survival_ as missing.

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