The main performance indicators of the three groups constructed through the clustering process are presented in Table 13. The high-performance group consists of 40 firms, 16 of which (32 percent) are informal. There are 261 firms in the medium-performance group and 60 percent of these firms are informal. The low performance group consists of 201 forms and only one eighth of these firms are formal. The productivity gap between formal and informal firms among the high and medium performance groups are negligible. Even though clusters comprise similar looking firms by construction, some gaps between formal and informal firms within each cluster persist. For example, in each group formal firms are larger in terms of sales, and they create more full-time employment. Even though some extreme values play a role in generating the employment gaps between formal and informal firms in the medium and highperformance groups, the gap is not only due to these extreme values. In the high-performance group the median number of full-time employees is 1 for informal firms and 3 for formal firms. Finally, in each group a larger percentage of formal firms have customers abroad: in the high-performance group the shares are 48 and 25 percent for formal and informal firms, respectively.

**Table 13: Performance indicators by clusters of firms**

||no. of<br>firms|mean log<br>productivity|mean log<br>sales|mean FT<br>employees|share of firms with<br>customers abroad|
|---|---|---|---|---|---|
|**High performance**||||||
|informal|16|14.5|14.8|0.2|24.9|
|formal|34|14.4|16.0|6.7|48.4|
|**Mediumperformance**||||||
|informal|157|12.0|12.7|1.0|5.9|
|formal|104|12.0|13.1|1.7|15.3|
|**Lowperformance**||||||
|informal|176|9.8|10.6|0.5|1.0|
|formal|25|10.3|11.7|4.4|3.2|

Note: Unweighted data. The clusters were created through the k-medians command of Stata.

Which firms are in the high-performance cluster, how different are they from firms in the medium- and low-performance clusters, and what are the main and missing “good” characteristics of informal firms in the high-performance cluster, relative to formal firms? Table 14 provides information about general features as well as the extent of heterogeneity across clusters for the “good” characteristics that are statistically significantly associated with performance outcomes, for both informal and formal firms. An important finding—aligned with the previous findings based on the substantial share of informal firms in both total firms having good characteristics and in the top productivity and sales deciles having good characteristics—is that one-third of all firms (16 out of 50) in the high-performance cluster are informal firms. In terms of the total number of informal firms, this represents 5% of informal firms, with the remaining 45% and 50% of informal firms being in the medium- and low-performance clusters, respectively.

> 307 firms, 194 of which are informal. The lowest productivity group consists of 153 firms with only 16 formal firms. Regarding the presence of informal firms in clusters of relatively high-performance firms, the two approaches yield the same qualitative result, namely that in both cases clusters of “high performance firms” include a sizeable share of informal firms.

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