**Ethiopia** The datasets we use for Ethiopia are the _census_ of Large and Medium Scale Manufacturing Industries Survey (LMSMI) and Small Scale Manufacturing Industries Survey (SSMI), both conducted by the Ethiopian Central Statistical Agency (CSA). The LMSMI covers all formal manufacturing firms in the country that use _power-driven_ machines in production process and employ _at least ten_ persons. The CSA conducted this census on annual basis since 1976.<sup>8</sup> In 2011, the raw dataset contains 1,936 establishments.

The SSMI survey covers establishments which use _power-driven_ machinery and engage _less than ten workers_ . The CSA conducted five waves of SSMI surveys: 1994–1995, 2001–2002, 2005–2006, 2007– 2008, and 2010–2011 - each wave collected on a _sample_ basis. The CSA sampling frame consists of all registered establishments employing less than 10 workers and using power driven machines. The SSMI survey was conducted using stratified sampling procedure to ensure representativeness of all establishments in the country. The CSA also provide a sampling weight for each firm. By merging the two datasets, we obtain complete distribution of establishments sizes for the formal manufacturing sector in the country. After merging, the share of small firms (included in the SSMI survey), in terms of number of establishments, accounts for 96 % of all manufacturing firms.<sup>9</sup>

**Ghana** The data for Ghana are based on the 2003 National Industrial Census (NIC) dataset, conducted by the Ghana Statistical Service (GSS). Three industrial censuses have been conducted: 1962, 1987 and 2003. The study is based on the 2003 census data , which includes establishments employing less than 10 workers. The census is similar in sampling design with the Ethiopian data; it covers the universe of establishments employing more than 10 workers and takes a representative sample of firms employing less than 10 workers. The census was undertaken in two phases. In the first phase, the registry covers all establishment (25,865) and includes information on persons engaged, location, age and industrial group. However, it contains no balance sheet information. In the second phase, the survey covers _all_ establishments with at-least 10 workers and a 5 % sample of manufacturing establishments engaging less than 10 workers. Data on production, sales, wages and salaries, material costs, fixed assets are reported for these firms. The raw data consist of a total of 3,302 manufacturing establishments. Applying the weights constructed by the GSS, sampled establishments represent a population of 22,544 firms in the country.<sup>10</sup>

**Kenya** The Kenyan data come from the 2010 Census of Industrial Production (CIP), conducted by the Kenyan National Bureau of Statistics (KNBS). The dataset provides detailed information needed for our analysis, including total sales, value of production, labor cost, capital, material and energy costs. The raw data contain information on about 2,089 manufacturing firms. However, a large number of firms report either missing or zero values of labor cost and capital stock, and thus were omitted from our analysis.

> 8Note that although the LSMI targets establishments with more than 10 employees, they remain in the census even if the number of workers decrease.

> 9In both LMSMI and SSMI, industries are classified according to the four-digit ISIC Rev 3.1 classification. The manufactures of food products and beverages is the largest sub-sector, measured by the number of firms.

> 10For more details about the sampling design and detailed description of the data, see Krakah et al. (2014).

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