||Table 9.4: TANZANIA, Extended produ|ction function an<br>**ICA Mt**|d compariso<br>**d**<sup>**1**</sup>|n of ICA method|with EM algorithm<br>**EM Algorithms**<sup>**2**</sup>|s|
|---|---|---|---|---|---|---|
||**Dependent variable: Log of total sales**|**e**|**o**|**[1]**|**[2]**|**[3]**|
|**Category**|**Variable**|**Coeff.**<br>**std. err.**|**Boot. st. er.**|**Coeff.**<br>**std. err.**|**Coeff.**<br>**std. err.**|**Coeff.**<br>**std. err.**|
|PF variables|Log-employment<br>Log-materials|0.1655<br>[0.0853]*<br>0.4252<br>[0.0581]***|(0.0512]***<br> <br>(0.0340]***|0.1142<br>[0.0919]<br>0.4867<br>[0.0677]***|0.0584<br>[0.0459]<br>0.7201<br>[0.0435]***|0.0207<br>[0.0501]<br>0.724<br>[0.0401]***|
||Log-capital|0.1589<br>[0.0323]***|(0.0208]***|0.1628<br>[0.0317]***|0.1326<br>[0.0286]***|0.1171<br>[0.0288]***|
|Infrastructure|Electricityfromowngenerator(b)|0.0021<br>[0.0016]|(0.0053]|0.0035<br>[0.0016]**|0.0036<br>[0.0011]***|0.0027<br>[0.0011]**|
||Losses due to water outages (b)|-0.0112<br>[0.0058]*|(0.0162]|-0.0172<br>[0.0049]***|-0.0087<br>[0.0033]**|-0.0082<br>[0.0034]**|
||Water fromown wellor water infrastructure (a)|0.0001<br>[0.0051]|(0.0011]|-0.0044<br>[0.0044]|0.0013<br>[0.0031]|0.0029<br>[0.0035]|
||Losses due to phone outages (a)|-0.0322<br>[0.0198]|(0.0071]***|-0.0066<br>[0.0268]|0.0115<br>[0.0232]|0.0159<br>[0.0260]|
||Transport outages (a)|-0.0047<br>[0.0703]|(0.1168]|0.0366<br>[0.0623]|0.0069<br>[0.0295]|-0.0287<br>[0.0280]|
||Dummyforown roads (b)|0.289<br>[0.1488]*|(0.0581]***|0.3789<br>[0.1279]***|0.2864<br>[0.1176]**|0.4766<br>[0.1189]***|
||Dummyfor webpage (b)|0.1578<br>[0.1212]|(0.1994]|0.0972<br>[0.1533]|0.1054<br>[0.1346]|0.2051<br>[0.1243]|
||Waitforawatersupply (a)|-0.1814<br>[0.0427]***|<br>(0.0702]**|-0.1354<br>[0.0533]**|-0.093<br>[0.0262]***|-0.1649<br>[0.0235]***|
||Low quality supplies (a)|-0.0163<br>[0.0128]|(0.0041]***|-0.0351<br>[0.0141]**|-0.0165<br>[0.0105]|-0.0202<br>[0.0112]*|
|Red tape,|Gift to obtainanoperatinglicense (b)|-0.4983<br>[0.1935]**|(0.1066]***|-0.3964<br>[0.1550]**|0.0537<br>[0.1051]|-0.0553<br>[0.0983]|
|corruption and|<br>Payments to deal withbureaucraticissues (b)|0.0939<br>[0.0299]***|<br>(0.0164]***|0.0808<br>[0.0272]***|0.0512<br>[0.0503]|0.085<br>[0.0396]**|
|crime|Daysin inspections (b)|-0.1045<br>[0.0735]|(0.0494]**|-0.0735<br>[0.0703]|0.0027<br>[0.0379]|0.0005<br>[0.0362]|
||Payments to obtaina contractwiththe government (b)|-0.0114<br>[0.0066]*|(0.0091]|-0.0026<br>[0.0059]|-0.0082<br>[0.0040]*|-0.0079<br>[0.0044]*|
||Security expenses (b)|-0.0119<br>[0.0042]***|<br>(0.0092]|-0.0081<br>[0.0040]*|-0.0023<br>[0.0031]|-0.0005<br>[0.0035]|
||Illegal payments in protection (b)|-0.0827<br>[0.0170]***|(0.1019]|-0.0518<br>[0.0140]***|-0.031<br>[0.0144]**|-0.0489<br>[0.0206]**|
|Finance and|Interestrate oftheloan(a)|-0.0109<br>[0.0145]|(0.0099]|-0.0139<br>[0.0127]|0.0033<br>[0.0073]|0.0117<br>[0.0078]|
|corporate|Working capital financed by commercialbanks (b)|-0.0009<br>[0.0018]|(0.0012]|-0.0015<br>[0.0016]|-0.0016<br>[0.0011]|-0.001<br>[0.0011]|
|governance|Working capital financed byleasing (b)|-0.0794<br>[0.0282]***|<br>(0.0054]***|-0.118<br>[0.0279]***|-0.015<br>[0.0038]***|-0.0893<br>[0.0428]**|
||Sales bought oncredit (b)|-0.0014<br>[0.0012]|(0.0011]|0<br>[0.0011]|0.0006<br>[0.0010]|0.0006<br>[0.0010]|
||Delay in clearing a domestic currency wire (a)|-0.3418<br>[0.3273]|(0.0935]***|-0.0439<br>[0.2600]|0.1691<br>[0.1544]|0.0498<br>[0.1606]|
|Quality,|Dummyfor newproduct (b)|0.0429<br>[0.1063]|(0.2036]|-0.0053<br>[0.1090]|-0.0481<br>[0.0782]|-0.0897<br>[0.0632]|
|innovation and|<br>Staff -skilledworkers (b)|0.0026<br>[0.0023]|(0.0050]|0.0025<br>[0.0021]|0.0036<br>[0.0014]**|0.0038<br>[0.0014]**|
|labor skills|Workforce with computer (b)|0.0066<br>[0.0030]**|(0.0056]|0.0071<br>[0.0034]**|0.0001<br>[0.0049]|0.003<br>[0.0041]|
|Other control|Dummyfor incorporated company (b)|0.2914<br>[0.2023]|(0.5683]|-0.0777<br>[0.4506]|0.1645<br>[0.1868]|0.0871<br>[0.2324]|
|variables|Dummy for FDI (b)|0.1397<br>[0.1445]|(0.2844]|0.0825<br>[0.1397]|-0.0662<br>[0.0792]|-0.0859<br>[0.0768]|
||Constant|<br>7.2978<br>[1.0168]***||<br>6.3827<br>[0.8512]***|<br>2.4414<br>[0.5932]***|<br>3.296<br>[0.6161]***|
||Industry/region/size/time dummies|Yes||Yes|Yes|Yes|
||Observations|559||560|603|597|
||R-squared|0.88||0.88|0.94|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, 2, See footnotes in Table 9.1. Source: Authors’ calculations with ICSs.

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