Table 9: Conditional Correlations Between SOE Revenue Share and Sector or Market Outcomes in Romania, 2011-2019

||(1)<br>Entry rate|(2)<br>Exit rate|(3)<br>Gross job<br>creation<br>rate|(4)<br>Gross job<br>destructio<br>n rate|(5)<br>Net job<br>creation<br>rate|(6)<br>Job<br>reallocati<br>on rate|(7)<br>Employm<br>ent share<br>of young<br>firms (<5)|(8)<br>Employme<br>nt growth<br>dispersion|(9)<br>Growth<br>of total<br>assets|(10)<br>Concentr<br>ation<br>(HHI)|
|---|---|---|---|---|---|---|---|---|---|---|
|**SOE revenue share**|||||||||||
|**(a) All sectors**|||||||||||
|_(i) All firms_|-0.061<sup>***</sup>|0.003|-0.062|0.151<sup>*</sup>|-0.213<sup>*</sup>|0.089|0.219<sup>***</sup>|0.240<sup>**</sup>|0.238|-0.000|
||(0.021)<br>|(0.020)|(0.107)|(0.084)|(0.117)|(0.152)|(0.063)|(0.104)<br>|(0.325)<br>|(0.047)<br>|
|_(ii) Among private firms_|-0.046<sup>**</sup>|0.004|-0.064|-0.040|-0.024|-0.104|0.049|0.240<sup>**</sup>|1.115<sup>**</sup>|-0.630<sup>***</sup>|
||(0.019)|(0.021)|(0.107)|(0.089)|(0.154)|(0.122)|(0.078)|(0.104)|(0.512)|(0.131)|
|**_(b) _Competitive Sectors**|||||||||||
|_(i) All firms_|0.049|-0.012|-0.393|-0.103|-0.290|-0.497|0.069|-0.029|0.406|0.070|
||(0.070)|(0.028)|(0.348)|(0.388)|(0.349)|(0.650)|(0.212)|(0.093)|(0.427)|(0.056)|
|_(ii) Among private firms_|0.051|-0.012|-0.376|-0.113|-0.263|-0.488|0.162|-0.029|0.380|-0.083<sup>**</sup>|
||(0.071)|(0.029)|(0.349)|(0.390)|(0.341)|(0.656)|(0.153)|(0.093)|(0.401)|(0.038)|
|Lagged average age|Yes|Yes|Yes|Yes|Yes|Yes|No|Yes|Yes|Yes|
|Lagged avg. employment|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|
|Sector size in economy|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|
|Industry effects|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|
|Year effects|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|
|Observations<sup>**†**</sup>|704|704|704|704|704|704|704|697|704|704|
|Within R-squared<sup>**†**</sup>|0.095|0.009|0.039|0.267|0.147|0.193|0.046|0.072|0.045|0.040|

Source: World Bank staff analysis using Romania MoF firm-level data, 2011-2019. Entry rate in industry j in year t is the ratio of the number of entrant firms to the average number of firms in t and t-1. Exit rate is the ratio of the number of exiting firms to the average number of firms in t and t-1. Gross job creation is the ratio of the sum of employment created by firms to the average number of employments in t and t-1. Gross job destruction is the ratio of the sum of employment reductions of firms to the average number of employments in t and t-1. Net job creation rate is the ratio of the difference between employment created and reductions by firms to the average number of employments in t and t-1. Job reallocation (churn) rate is the sum of the absolute value of changes in employment divided by the average employment between years t and t-1. Employment share of young firms is the fraction of employees in total employment who are employed by firms aged less than 5 years. Employment growth dispersion is the standard deviation of employment growth of firms in an industry, where employment growth is the change in employment divided by the average employment between years t and t-1. HHI is the Herfindahl-Hirschman Index of sector. Growth of total assets is the change in total assets divided by the average of total assets between t and t-1. Concentration calculated as the sum of squared market (revenue) share of each firm operating in a sector. SOE variables are dummy variables taking the value one if national or subnational governments have ownership stake of 10-100% in the firm. The reference group is private-owned enterprises (POEs), defined as firms where national or subnational governments own 0-9.9%. All models include 2-digit NACE industry and yearfixed effects. Standard errors clustered at the industry level are in parentheses. ***, **, and * indicate significance at 1 percent, 5 percent, and 10 percent.<sup>**†**</sup> indicates values are for the model using all sectors and all firms. All models include a constant term.

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