Table 10.1: INDIA, Extended production function and comparison of ICA method with extensions

|**Dependent**|**variable: log of total sales**||**ICA meth**|**od and extensions**||**Complete case**<sup>**4**</sup>|**Multiple imputation**|
|---|---|---|---|---|---|---|---|
|||**Original ICA**|**meth.**<sup>**1**</sup>|**Random ICA m.**<sup>**2**</sup>|**ICA m. on inputs**<sup>**3**</sup>||**(Switching regr.)**<sup>**5**</sup>|
|**Category**|**Variable**|**Coeff.**<br>**std. err.**|**Boot. s.e**|**Coeff.**<br>**std. err.**|**Coeff.**<br>**std. err.**|**Coeff.**<br>**std. err.**|**Coeff.**<br>**std. err.**|
|PF variables|Log-employment|0.1027<br>[0.0341]**|*<br>(0.0306)***|0.1051<br>[0.0346]***|0.0922<br>[0.0343]***|0.1168<br>[0.0317]***|0.0659<br>[0.0245]***|
||Log-materials|0.7989<br>[0.0185]**|*<br>(0.0462)***|0.8135<br>[0.0186]***|0.8054<br>[0.0192]***|0.7994<br>[0.0236]***|0.8560<br>[0.0169]***|
||Log-capital|0.0676<br>[0.0239]**|*<br>(0.0153)***|0.0438<br>[0.0143]***|0.0722<br>[0.0248]***|0.0504<br>[0.0170]***|0.0452<br>[0.0128]***|
|Infrastructur|e<br>Longest # ofdays to clearcustomsforexport (a)|-0.0125<br>[0.0263]|(0.0376)|-0.01<br>[0.0317]|-0.0167<br>[0.0266]|-0.0432<br>[0.0268]|-0.0155<br>[0.0213]|
||Dummyforowngenerator|0.0538<br>[0.0422]|(0.0424)|-0.0083<br>[0.0453]|0.0516<br>[0.0431]|0.0424<br>[0.0293]|0.0198<br>[0.0254]|
||Watersupplyfrompublic sources (b)|0.0014<br>[0.0005]**|*<br>(0.0008)*|0.0009<br>[0.0006]|0.0014<br>[0.0005]***|0.0013<br>[0.0004]***|0.0008<br>[0.0003]**|
||Shipmentlossesinthe domesticmarket (b)|-0.0047<br>[0.0039]|(0.0128)|-0.0075<br>[0.0034]**|-0.0037<br>[0.0038]|-0.0023<br>[0.0054]|-0.0020<br>[0.0029]|
||Dummyforowntransport|0.0238<br>[0.0475]|(0.0861)|0.0013<br>[0.0459]|0.0334<br>[0.0482]|0.0465<br>[0.0369]|-0.0038<br>[0.0347]|
||Dummyfor web page|0.0402<br>[0.0394]|(0.0264)|0.0516<br>[0.0427]|0.0329<br>[0.0382]|0.0098<br>[0.0327]|0.0067<br>[0.0316]|
||Dummy for security|0.0467<br>[0.0423]|(0.1407)|0.045<br>[0.0392]|0.0573<br>[0.0429]|0.0564<br>[0.0293]*|0.0582<br>[0.0293]**|
|Red tape,|Sales reported for taxes(b)|0.0006<br>[0.0014]|(0.0052)|0.002<br>[0.0012]*|0.0009<br>[0.0014]|0.0002<br>[0.0010]|0.0010<br>[0.0009]|
|corruption|Workforcereportedfortaxes (b)|-0.0015<br>[0.0012]|(0.0042)|-0.0021<br>[0.0009]**|-0.0014<br>[0.0012]|0.0005<br>[0.0008]|-0.0010<br>[0.0007]|
|and crime|Dummyforpayments to speed upbureaucracy|-0.0464<br>[0.0336]|(0.0526)|-0.0148<br>[0.0265]|-0.0416<br>[0.0335]|0.0072<br>[0.0247]|0.0004<br>[0.0254]|
||Dummyfor interventionistlabor regulation|-0.036<br>[0.0361]|(0.0211)*|-0.0372<br>[0.0369]|-0.0275<br>[0.0368]|-0.031<br>[0.0330]|-0.0303<br>[0.0322]|
||Absenteeism (b)|-0.0299<br>[0.0222]|(0.0571)|-0.0233<br>[0.0256]|-0.0263<br>[0.0216]|-0.0011<br>[0.0193]|-0.0108<br>[0.0158]|
|Finance and|Dummyfor trade association|0.0785<br>[0.0455]*|(0.0456)*|0.094<br>[0.0480]*|0.0734<br>[0.0454]|0.022<br>[0.0388]|0.0263<br>[0.0302]|
|corporate|Working capital financed by domestic private banks (b)|0.0002<br>[0.0007]|(0.0005)|0.0005<br>[0.0006]|0.0002<br>[0.0008]|0.0003<br>[0.0008]|0.0002<br>[0.0005]|
|governance|Dummyforexternalaudit|0.0691<br>[0.0395]*|(0.0452)|0.0541<br>[0.0440]|0.0627<br>[0.0386]|0.0392<br>[0.0300]|0.0689<br>[0.0294]**|
||Dummy for loan (b)|0.1102<br>[0.0473]**|(0.0637)*|0.0851<br>[0.0538]|0.1107<br>[0.0492]**|-0.0397<br>[0.0409]|0.0188<br>[0.0337]|
|Quality,|Dummyfor R&D(a)|0.1787<br>[0.2382]|(0.2347)|0.0959<br>[0.1637]|0.1885<br>[0.2400]|0.0862<br>[0.1313]|0.1143<br>[0.1353]|
|innovation|Dummyforproductinnovation|-0.0073<br>[0.0360]|(0.0710)|-0.0331<br>[0.0392]|-0.0079<br>[0.0366]|-0.0528<br>[0.0262]**|-0.0285<br>[0.0276]|
|and labor<br>|Dummyfor foreign license(b)|0.204<br>[0.1053]*|(0.1302)|0.2384<br>[0.1181]**|0.1555<br>[0.1013]|0.1401<br>[0.0939]|0.1032<br>[0.0835]|
|skills|Dummyfor internaltraining (b)|0.0579<br>[0.0533]|(0.0516)|0.0744<br>[0.0649]|0.0631<br>[0.0537]|0.0884<br>[0.0458]|0.0717<br>[0.0440]*|
||Unskilled workforce(a)|0.0013<br>[0.0036]|(0.0016)|0.0038<br>[0.0042]|0.0003<br>[0.0037]|-0.001<br>[0.0033]|-0.0030<br>[0.0029]|
||Workforce with computer|0.0017<br>[0.0011]|(0.0015)|0.0014<br>[0.0009]|0.0019<br>[0.0011]*|0.0007<br>[0.0007]|0.0012<br>[0.0008]|
|Other control|<br>Dummyfor incorporated company|0.0265<br>[0.0396]|(0.0901)|0.056<br>[0.0358]|0.0127<br>[0.0423]|0.0494<br>[0.0282]*|0.0280<br>[0.0311]|
|variables|Age|0.0534<br>[0.0267]**|<br>(0.0214)**|0.0352<br>[0.0287]|0.0525<br>[0.0271]*|0.0322<br>[0.0208]|0.0392<br>[0.0182]**|
||Share ofexports (b)|0.001<br>[0.0009]|(0.0005)**|0.001<br>[0.0010]|0.001<br>[0.0009]|0.0002<br>[0.0005]|-0.0001<br>[0.0005]|
||Trade union(b)|0.0008<br>[0.0012]|(0.0010)|0.0015<br>[0.0013]|0.001<br>[0.0013]|0.0001<br>[0.0008]|0.0007<br>[0.0008]|
||Strikes (b)|-0.0683<br>[0.0449]|(0.0821)|-0.0557<br>[0.0470]|-0.0707<br>[0.0457]|0.0248<br>[0.0439]|-0.0112<br>[0.0321]|
||Constant|0.7377<br>[0.3449]**||0.7174<br>[0.3636]*|0.7182<br>[0.3455]**|1.0943<br>[0.2692]***|0.9976<br>[0.2528]***|
||Industry/region/size/time dummies|Yes||Yes|Yes|Yes|Yes|
||Observations|5211||5063|5134|3943|5262|
||R-squared|0.88||0.88|0.88|0.94|-|

Estimating results of equation (1) under different imputation mechanisms for missing data. Those observations with missing values in all sales, labor (labor cost), materials and capital are excluded in all the regressions. 1 See footnote 1 in Table 9.1. 2 Random ICA method is described in section 5.2.1. 3 ICA method on inputs is in section 5.2.3. 4 Complete case considers missingness in PF variables only, not in IC variables. 5 Multiple imputation via switching regression can be found in section 5.3.

In all the cases significance is given by clustered and White- robust standard errors in brackets; *** 1%, **5%, * 10%. In the case of the ICA method, in parentheses are bootstrap standard errors after 1000 replications (see section 5.2.2 on the motivation for using bootstrap standard errors). Correlation by cluster is also considered. Source: Authors’ calculations with ICSs.

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